HR 833 IH
106th CONGRESS
1st Session
H. R. 833
To amend title 11 of the United States Code, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
February 24, 1999
Mr. GEKAS (for himself, Mr. BOUCHER, Mr. MCCOLLUM, Mr. MORAN of Virginia, Mr.
ARMEY, Mr. FROST, Mr. MENENDEZ, Ms. PRYCE of Ohio, Mrs. FOWLER, Mr. KENNEDY of
Rhode Island, Mr. DREIER, Mr. CANADY of Florida, Mr. GOODLATTE, Mr. CHABOT, Mr.
BRYANT, Mr. ROTHMAN, Mrs. BONO, Mr. ANDREWS, Mr. BAKER, Mr. BEREUTER, Mr.
CUNNINGHAM, Mr. DOOLEY of California, Ms. DUNN, Ms. HOOLEY of Oregon, Mrs.
KELLY, Mr. LARGENT, Mr. MALONEY of Connecticut, Mr. RILEY, Mr. ROEMER, Mr.
SESSIONS, Mr. SMITH of Washington, Mrs. TAUSCHER, Ms. VELAZQUEZ, Mr. WYNN, Mr.
DAVIS of Virginia, Mr. DAVIS of Florida, and Mr. HALL of Texas) introduced the
following bill; which was referred to the Committee on the Judiciary, and in
addition to the Committee on Banking and 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; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Bankruptcy Reform Act of
1999'.
(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--CONSUMER BANKRUPTCY PROVISIONS
Subtitle A--Needs based bankruptcy
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Subtitle B--Consumer Bankruptcy Protections
Sec. 107. Debtor's bill of rights.
Sec. 109. Sense of the congress.
Sec. 110. Discouraging abuse reaffirmation practices.
Sec. 111. Promotion alternative dispute resolution.
Sec. 112. Enhanced disclosure for credit extensions secured by a
dwelling.
Sec. 113. Dual use debit card.
Sec. 114. Enhanced disclosures under an open-end credit plan.
Sec. 115. Protection of savings earmarked for the postsecondary
education of children.
Sec. 116. Effect of discharge.
Sec. 117. Automatic stay.
Sec. 118. Reinforce the fresh start.
Sec. 119. Discouraging bad faith repeat filings.
Sec. 120. Curbing abusive filings.
Sec. 121. Debtor retention of personal property security.
Sec. 122. Relief from the automatic stay when the debtor does not
complete intended surrender of consumer debt collateral.
Sec. 123. Giving secured creditors fair treatment in chapter 13.
Sec. 124. Restraining abusive purchases on secured credit.
Sec. 125. Fair valuation of collateral.
Sec. 128. Rolling stock equipment.
Sec. 129. Discharge under chapter 13.
Sec. 130. Bankruptcy judgeships.
Sec. 131. Additional amendments to title 11, United States Code.
Sec. 132. Amendment to section 1325 of title 11, United States
Code.
Sec. 133. Application of the codebtor stay only when the stay protects
the debtor.
Sec. 134. Adequate protection for investors.
Sec. 135. Limitation on luxury goods.
Sec. 136. Giving debtors the ability to keep leased personal property by
assumption.
Sec. 137. Adequate protection of lessors and purchase money secured
creditors.
Sec. 139. Automatic stay.
Sec. 140. Extend period between bankruptcy discharges.
Sec. 141. Definition of domestic support obligation.
Sec. 142. Priorities for claims for domestic support obligations.
Sec. 143. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 144. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 145. Nondischargeability of certain debts for alimony, maintenance,
and support.
Sec. 146. Continued liability of property.
Sec. 147. Protection of domestic support claims against preferential
transfer motions.
Sec. 148. Definition of household goods and antiques.
Sec. 149. Nondischargeable debts.
TITLE II--DISCOURAGING BANKRUPTCY ABUSE
Sec. 201. Reenactment of chapter 12.
Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.
Sec. 207. Amendment to section 546 of title 11, United States
Code.
Sec. 209. Amendment to section 330(a) of title 11, United States
Code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Claims relating to insurance deposits in cases ancillary to
foreign proceedings.
Sec. 216. Defaults based on nonmonetary obligations.
TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS
Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.
TITLE IV--SMALL BUSINESS BANKRUPTCY PROVISIONS
Sec. 401. Flexible rules for disclosure Statement and plan.
Sec. 403. Standard form disclosure Statement and plan.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms for small business
cases.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment
of trustee.
Sec. 414. Study of operation of title 11 of the United States Code with
respect to small businesses.
Sec. 415. Payment of interest.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM
Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide
required information.
Sec. 605. Adequate time to prepare for hearing on confirmation of the
plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain
cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the
Federal rules of bankruptcy procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy
cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent
students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.
TITLE VII--BANKRUPTCY DATA
Sec. 701. Improved bankruptcy statistics.
Sec. 702. Uniform rules for the collection of bankruptcy data.
Sec. 703. Sense of the Congress regarding availability of bankruptcy
data.
TITLE VIII--BANKRUPTCY TAX PROVISIONS
Sec. 801. Treatment of certain liens.
Sec. 802. Effective notice to government.
Sec. 803. Notice of request for a determination of taxes.
Sec. 804. Rate of interest on tax claims.
Sec. 805. Tolling of priority of tax claim time periods.
Sec. 806. Priority property taxes incurred.
Sec. 807. Chapter 13 discharge of fraudulent and other taxes.
Sec. 808. Chapter 11 discharge of fraudulent taxes.
Sec. 809. Stay of tax proceedings.
Sec. 810. Periodic payment of taxes in chapter 11 cases.
Sec. 811. Avoidance of statutory tax liens prohibited.
Sec. 812. Payment of taxes in the conduct of business.
Sec. 813. Tardily filed priority tax claims.
Sec. 814. Income tax returns prepared by tax authorities.
Sec. 815. Discharge of the estate's liability for unpaid taxes.
Sec. 816. Requirement to file tax returns to confirm chapter 13
plans.
Sec. 817. Standards for tax disclosure.
Sec. 818. Setoff of tax refunds.
TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 901. Amendment to add chapter 15 to title 11, United States
Code.
Sec. 902. Amendments to other chapters in title 11, United States
Code.
TITLE X--FINANCIAL CONTRACT PROVISIONS
Sec. 1001. Treatment of certain agreements by conservators or receivers
of insured depository institutions.
Sec. 1002. Authority of the corporation with respect to failed and
failing institutions.
Sec. 1003. Amendments relating to transfers of qualified financial
contracts.
Sec. 1004. Amendments relating to disaffirmance or repudiation of
qualified financial contracts.
Sec. 1005. Clarifying amendment relating to master agreements.
Sec. 1006. Federal Deposit Insurance Corporation Improvement Act of
1991.
Sec. 1007. Bankruptcy code amendments.
Sec. 1008. Recordkeeping requirements.
Sec. 1009. Exemptions from contemporaneous execution requirement.
Sec. 1010. Damage measure.
Sec. 1012. Asset-backed securitizations.
Sec. 1013. Federal reserve collateral requirements.
Sec. 1014. Severability; effective date; application of
amendments.
TITLE XI--TECHNICAL CORRECTIONS
Sec. 1102. Adjustment of dollar amounts.
Sec. 1103. Extension of time.
Sec. 1104. Technical amendments.
Sec. 1105. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 1106. Limitation on compensation of professional persons.
Sec. 1107. Special tax provisions.
Sec. 1108. Effect of conversion.
Sec. 1109. Amendment to table of sections.
Sec. 1110. Allowance of administrative expenses.
Sec. 1113. Exceptions to discharge.
Sec. 1114. Effect of discharge.
Sec. 1115. Protection against discriminatory treatment.
Sec. 1116. Property of the estate.
Sec. 1118. Postpetition transactions.
Sec. 1119. Disposition of property of the estate.
Sec. 1120. General provisions.
Sec. 1121. Appointment of elected trustee.
Sec. 1122. Abandonment of railroad line.
Sec. 1123. Contents of plan.
Sec. 1124. Discharge under chapter 12.
Sec. 1125. Bankruptcy cases and proceedings.
Sec. 1126. Knowing disregard of bankruptcy law or rule.
Sec. 1127. Transfers made by nonprofit charitable corporations.
Sec. 1128. Prohibition on certain actions for failure to incur finance
charges.
Sec. 1129. Protection of valid purchase money security interests.
TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1201. Effective date; application of amendments.
TITLE I--CONSUMER BANKRUPTCY PROVISIONS
Subtitle A--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
13';
(A) by inserting `(1)' after `(b)'; and
(B) in paragraph (1), as redesignated by subparagraph (A) of this
paragraph--
(i) in the first sentence--
(I) by striking `but not at the request or suggestion' and
inserting `, panel trustee or';
(II) by inserting `, or, with the debtor's consent, convert such a
case to a case under chapter 13 of this title,' after `consumer
debts'; and
(III) by striking `substantial abuse' and inserting `abuse';
and
(ii) by striking the last sentence and inserting 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 less amounts set
forth in clauses (ii), (iii), and (iv), and multiplied by 60 months is not
less than 25 percent of the debtor's nonpriority unsecured claims in the case
or $5,000, whichever is less.
`(ii) The debtor's monthly expenses shall be the applicable monthly
expenses under National Standards, Local Standards, and Other Necessary
Expenses allowance (excluding payments for debts) 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.
`(iii) The debtor's average monthly payments on account of secured debts
shall be calculated as 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 dividing that total by
60 months.
`(iv) The debtor's expenses for payment of all priority claims (including
priority child support and alimony claims), which shall be calculated as the
total amount of debts entitled to priority, and dividing the total by 60
months.
`(B) In any proceeding brought under this subsection, the presumption of
abuse may be rebutted only by demonstrating extraordinary circumstances that
require additional expenses or adjustment of current monthly total income. In
order to establish extraordinary circumstances, the debtor must itemize each
additional expense or adjustment of income and provide documentation for such
expenses and a detailed explanation of the extraordinary circumstances which
make such expenses necessary and reasonable. The debtor, and the attorney for
the debtor if the debtor has an attorney, shall attest under oath to the
accuracy of any information provided to demonstrate that additional expenses
or adjustment to income are required. The presumption of abuse may be rebutted
only if such additional expenses or adjustments to income cause the debtor's
current monthly income less the amounts set forth in clauses (ii), (iii), and
(iv) of subparagraph (A) when multiplied by 60 to be less than 25 percent of
the debtor's nonpriority unsecured claims $5,000, whichever is less.
`(C) As part of the schedule of current income and expenditures required
under section 521 of this title, the debtor shall include a statement of the
debtor's current monthly income, and the calculations which determine whether
a presumption arises under subparagraph (A)(i), showing how each amount is
calculated. The bankruptcy rules promulgated under section 2075 of title 28,
United States Code, shall prescribe a form for such statement and may provide
general rules on its content.
`(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) 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.'.
(b) DEFINITION- Title 11, United States Code, is amended--
(1) in section 101 by inserting after paragraph (10) the
following:
`(10A) `currently monthly income' means the average monthly income from
all sources derived which the debtor, or in a joint case, the debtor and the
debtor's spouse, receive without regard to whether it is taxable income, in
the 180 days preceding the date of determination, and includes any amount
paid by anyone other than the debtor or, in a joint case, the debtor and the
debtor's spouse, on a regular basis to the household expenses of the debtor
or the debtor's dependents and, in a joint case, the debtor's spouse if not
otherwise a dependent;'; and
(i) in paragraph (8) by striking `and' at the end;
(ii) in paragraph (9) by striking the period at the end and inserting
`; and'; and
(iii) by adding at the end the following:
`(10) With respect to an individual debtor under this chapter, the panel
trustee or bankruptcy administrator shall review all materials filed by the
debtor and, 10 days prior to 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) of this title, and the court shall provide a copy
of such statement to all creditors within 5 days. If, based on the filing of
such statement with the court, the panel trustee or bankruptcy administrator
determines that the debtor's case should be presumed to be an abuse under
section 707(b) of this title and the debtor's current monthly income, when
multiplied by 12, is not less than the highest national median family income
reported for a family of equal or lesser size, or in the case of a household
of 1 person, the national median household income for 1 earner, the panel
trustee or bankruptcy administrator shall within 30 days file a motion to
dismiss or convert under section 707(b) of this title, or file a statement
setting forth the reasons the trustee does not believe that such a motion
would be appropriate.
`(3)(A) If a panel trustee appointed under section 586(a)(1) of title 28
brings a motion for dismissal or conversion under this subsection and the
court grants that motion and finds that the action of the counsel for the
debtor in filing under this chapter was not substantially justified, the court
shall order the counsel for the debtor to reimburse the trustee for all
reasonable costs in prosecuting the motion, including reasonable attorneys'
fees.
`(B) If the court finds that the attorney for the debtor violated Rule
9011, at a minimum, the court shall order--
`(i) the assessment of an appropriate civil penalty against the counsel
for the debtor; and
`(ii) the payment of the civil penalty to the panel trustee or the
United States trustee.
`(C) In the case of a petition referred to in subparagraph (B), the
signature of an attorney shall constitute a certificate that the attorney
has--
`(i) performed a reasonable investigation into the circumstances that
gave rise to the petition; and
`(ii) determined that the petition--
`(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) of this subsection.
`(4)(A) Except as provided in subparagraph (B), the court may award a
debtor all reasonable costs in contesting a motion brought by a party in
interest (other than a panel trustee or United States trustee) under this
subsection (including reasonable attorneys' fees) if--
`(i) the court does not grant the motion; and
`(ii) the court finds that--
`(I) the position of the party that brought the motion was not
substantially justified; or
`(II) the party brought the motion solely for the purpose of coercing
a debtor into waiving a right guaranteed to the debtor under this
title.
`(B) A party in interest that has a claim of an aggregate amount less than
$1,000 shall not be subject to subparagraph (A).
`(5) However, only the judge, United States trustee, bankruptcy
administrator or panel trustee may bring a motion under this section if the
debtor and the debtor's spouse combined, as of the date of the order for
relief, have current monthly total income equal to or less than the national
median household monthly income calculated on a monthly basis for a household
of equal size. However, for a household of more than 4 individuals, the median
income shall be that of a household of 4 individuals plus $583 for each
additional member of that household.'.
(c) CLERICAL AMENDMENT- The table of sections at the beginning of 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
13.'.
SEC. 103. 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, that individual shall be given or
obtain (as required in section 521(a)(1), as part of the certification process
under subchapter 1 of chapter 5) a written notice prescribed by the United
States trustee for the district in which the petition is filed pursuant to
section 586 of title 28. The notice shall contain the following:
`(1) A brief description of chapters 7, 11, 12, and 13 and the general
purpose, benefits, and costs of proceeding under each of those
chapters.
`(2) A brief description of services that may be available to that
individual from a credit counseling service that is approved by the United
States trustee for that district.'.
SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.
(a) DEVELOPMENT OF FINANCIAL MANAGEMENT AND TRAINING CURRICULUM AND
MATERIALS- The Director of the Executive Office for United States Trustees (in
this section referred to as the `Director') shall consult with a wide range of
individuals who are experts in the field of debtor education, including
trustees who are appointed under chapter 13 of title 11 of the United States
Code and who operate financial management education programs for debtors, and
shall develop a financial management training curriculum and materials that
can be used to educate individual debtors on how to better manage their
finances.
(b) TEST--(1) The Director shall select 3 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) For a 1-year period beginning not later than 270 days after the date
of the enactment of this Act, such curriculum and materials shall be made
available by the Director, directly or indirectly, on request to individual
debtors in cases filed in such 1-year period under chapter 7 or 13 of title 11
of the United States Code.
(c) EVALUATION- (1) During the 1-year 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 of the United States Code, and by consumer counselling
groups.
(2) 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.
Subtitle B--Consumer Bankruptcy Protections
SEC. 105. DEFINITIONS.
(a) DEFINITIONS- Section 101 of title 11, United States Code, is
amended--
(1) by inserting after paragraph (3) the following:
`(3A) `assisted person' means any person whose debts consist primarily
of consumer debts and whose non-exempt assets are less than
$150,000;';
(2) by inserting after paragraph (4) the following:
`(4A) `bankruptcy assistance' means any goods or services sold or
otherwise provided to an assisted person with the express or implied purpose
of providing information, advice, counsel, document preparation or filing,
or attendance at a creditors' meeting or appearing in a proceeding on behalf
of another or providing legal representation with respect to a proceeding
under this title;'; and
(3) by inserting after paragraph (12A) the following:
`(12B) `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 pursuant to
section 110 of this title, but does not include any person that is any of
the following or an officer, director, employee or agent thereof--
`(A) any nonprofit organization which is exempt from taxation under
section 501(c)(3) of the Internal Revenue Code of 1986;
`(B) any creditor of the person to the extent the creditor is
assisting the person to restructure any debt owed by the person to the
creditor; or
`(C) any depository institution (as defined in section 3 of the
Federal Deposit Insurance Act) or any Federal credit union or State credit
union (as those terms are defined in section 101 of the Federal Credit
Union Act), or any affiliate or subsidiary of such a depository
institution or credit union;'.
(b) CONFORMING AMENDMENT- In section 104(b)(1) by inserting `101(3),'
after `sections'.
SEC. 106. DISCLOSURES.
(a) DISCLOSURES- Subchapter II of chapter 5 of title 11, United States
Code, is amended by adding at the end the following:
`Sec. 526. Disclosures
`(a) A debt relief agency providing bankruptcy assistance to an assisted
person shall provide the following notices to the assisted person:
`(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) of this section and no later than three 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 of the
following--
`(A) all information the assisted person is required to provide with a
petition and thereafter during a case under this title must be complete,
accurate and truthful;
`(B) all assets and all liabilities must 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 total income, projected monthly net income and,
in a chapter 13 case, monthly net income must be stated after reasonable
inquiry; and
`(D) that information an assisted person provides during their case
may be audited pursuant to this title and that failure to provide such
information may result in dismissal of the proceeding under this title or
other sanction including, in some instances, criminal sanctions.
`(b) A debt relief agency providing bankruptcy assistance to an assisted
person shall provide each assisted person at the same time as the notices
required under subsection (a)(1) with the following statement, to the extent
applicable, or one substantially similar. The statement shall be clear and
conspicuous and shall be in a single document separate from other documents or
notices provided to the assisted person:
`IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER
`If you decide to seek bankruptcy relief, you can represent yourself, you
can hire an attorney to represent you, or you can get help in some localities
from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES
AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT
SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU
AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.
`The following information helps you understand what must be done in a
routine bankruptcy case to help you evaluate how much service you need.
Although bankruptcy can be complex, many cases are routine.
`Before filing a bankruptcy case, either you or your attorney should
analyze your eligibility for different forms of debt relief made available by
the Bankruptcy Code and which form of relief is most likely to be beneficial
for you. Be sure you understand the relief you can obtain and its limitations.
To file a bankruptcy case, documents called a Petition, Schedules and
Statement of Financial Affairs, as well as in some cases a Statement of
Intention need to be prepared correctly and filed with the bankruptcy court.
You will have to pay a filing fee to the bankruptcy court. Once your case
starts, you will have to attend the required first meeting of creditors where
you may be questioned by a court official called a `trustee' and by
creditors.
`If you choose to file a chapter 7 case, you may be asked by a creditor to
reaffirm a debt. You may want help deciding whether to do so and a creditor is
not permitted to coerce you into reaffirming your debts.
`If you choose to file a chapter 13 case in which you repay your creditors
what you can afford over three to five 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 may be provided orally or 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
total income, projected monthly income and, in a chapter 13 case, net
monthly income, 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 two years after the later of 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, is amended by inserting after the item relating to section
525 the following:
SEC. 107. DEBTOR'S BILL OF RIGHTS.
(a) DEBTOR'S BILL OF RIGHTS- Subchapter II of chapter 5 of title 11,
United States Code, as amended by section 106, is amended by adding at the end
the following:
`Sec. 527. Debtor's bill of rights
`(a) A debt relief agency shall--
`(1) no later than five business days after the first date on which a
debt relief 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 the assisted person
specifying clearly and conspicuously the services the agency will provide
the assisted person and the basis on which fees or charges will be made for
such services and the terms of payment, and give the assisted person a copy
of the fully executed and completed contract in a form the person can
keep;
`(2) 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
proceedings under this title, clearly and conspicuously using the following
statement: `We are a debt relief agency. We help people file Bankruptcy
petitions to obtain relief under the Bankruptcy Code.' or a substantially
similar statement. An advertisement shall be of bankruptcy assistance
services if it describes or offers bankruptcy assistance with a chapter 13
plan, regardless of whether chapter 13 is specifically mentioned, including
such statements as `federally supervised repayment plan' or `Federal debt
restructuring help' or other similar statements which would lead a
reasonable consumer to believe that help with debts was being offered when
in fact in most cases the help available is bankruptcy assistance with a
chapter 13 plan; and
`(3) if an advertisement directed to the general public indicates that
the debt relief agency provides assistance with respect to credit defaults,
mortgage foreclosures, lease eviction proceedings, excessive debt, debt
collection pressure, or inability to pay any consumer debt, disclose
conspicuously in that advertisement that the assistance is with respect to
or may involve proceedings under this title, using the following statement:
`We are a debt relief agency. We help people file Bankruptcy petitions to
obtain relief under the Bankruptcy Code.' or a substantially similar
statement.
`(b) A debt relief agency shall not--
`(1) fail to perform any service which the debt relief agency has told
the assisted person or prospective assisted person the agency would provide
that person in connection with the preparation for or activities during a
proceeding under this title;
`(2) make any statement, or counsel or advise any assisted person to
make any statement in any document filed in a proceeding under this title,
which is untrue and misleading or which upon the
exercise of reasonable care, should be known by the debt relief agency to be
untrue or misleading;
`(3) misrepresent to any assisted person or prospective assisted person,
directly or indirectly, affirmatively or by material omission, what services
the debt relief agency can reasonably expect to provide that person, or the
benefits an assisted person may obtain or the difficulties the person may
experience if the person seeks relief in a proceeding pursuant to this
title; or
`(4) advise an assisted person or prospective assisted person to incur
more debt in contemplation of that person filing a proceeding under this
title or in order 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 proceeding under this title.'.
(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title 11,
United States Code, as amended by section 106, is amended by inserting after
the item relating to section 526, the following:
`527. Debtor's bill of rights.'.
SEC. 108. ENFORCEMENT.
(a) ENFORCEMENT- Subchapter II of chapter 5 of title 11, United States
Code, as amended by sections 106 and 107, is amended by adding at the end the
following:
`Sec. 528. Debt relief agency enforcement
`(a) ASSISTED PERSON WAIVERS INVALID- Any waiver by any assisted person of
any protection or right provided by or under section 526 or 527 of this title
shall be void and may not be enforced by any Federal or State court or any
other person.
`(1) Any contract between a debt relief agency and an assisted person
for bankruptcy assistance which does not comply with the material
requirements of section 526 or 527 of this title shall be treated as void
and may not be enforced by any Federal or State court or by any other
person.
`(2) Any debt relief agency which has been found, after notice and
hearing, to have--
`(A) negligently failed to comply with any provision of section 526 or
527 with respect to a bankruptcy case or related proceeding of an assisted
person;
`(B) provided bankruptcy assistance to an assisted person in a case or
related proceeding which is dismissed or converted because the debt relief
agency's negligent failure to file bankruptcy papers, including papers
specified in section 521 of this title; or
`(C) negligently or intentionally disregarded the material
requirements of this title or the Federal Rules of Bankruptcy Procedure
applicable to such debt relief agency shall be liable to the assisted
person in the amount of any fees and charges in connection with providing
bankruptcy assistance to such person which the debt relief agency has
already been paid on account of that proceeding.
`(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 section 526 or 527 of this title, the State--
`(A) may bring an action to enjoin such violation;
`(B) may bring an action on behalf of its residents to recover the
actual damages of assisted persons arising from such violation, including
any liability under paragraph (2); and
`(C) in the case of any successful action under subparagraph (A) or
(B), shall be awarded the costs of the action and reasonable attorney fees
as determined by the court.
`(4) The United States District Court for any district located in the
State shall have concurrent jurisdiction of any action under subparagraph
(A) or (B) of paragraph (3).
`(5) Notwithstanding any other provision of Federal law, if the court,
on its own motion or on the motion of the United States trustee, finds that
a person intentionally violated section 526 or 527 of this title, or engaged
in a clear and consistent pattern or practice of violating section 526 or
527 of this title, the court may--
`(A) enjoin the violation of such section; or
`(B) impose an appropriate civil penalty against such person.
`(c) RELATION TO STATE LAW- This section and sections 526 and 527 shall
not annul, alter, affect or exempt any person subject to those 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.'.
(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title 11,
United States Code, as amended by sections 106 and 107, is amended by
inserting after the item relating to section 527, the following:
`528. Debt relief agency enforcement.'.
SEC. 109. SENSE OF THE CONGRESS.
It is the sense of the Congress that States should develop curricula
relating to the subject of personal finance, designed for use in elementary
and secondary schools.
SEC. 110. DISCOURAGING ABUSE REAFFIRMATION PRACTICES.
Section 524(c)(2) of title 11, United States Code, is amended--
(1) in subparagraph (A) by striking `and' at the end;
(2) in subparagraph (B) by adding `and' at the end; and
(3) by adding at the end the following:
`(C) if the consideration for such agreement is based on a wholly
unsecured consumer debt, such agreement contains a clear and conspicuous
statement which advises the debtor--
`(i) that the debtor is entitled to a hearing before the court at
which the debtor shall appear in person and at which the court will decide
whether the agreement is an undue hardship, not in the debtor's best
interest, and not the result of a threat by the creditor to take any
action that cannot be legally taken or that is not intended to be taken;
and
`(ii) that if the debtor is represented by counsel, the debtor may
waive the debtor's right to such a hearing by signing a statement waiving
the hearing, stating that the debtor is represented by counsel, and
identifying such counsel;';
(3) in subsection (6)(A)--
(A) by striking `and' at the end of clause (i);
(B) by striking the period at the end of clause (ii) and inserting `;
and';
(C) by adding at the end thereof the following:
`(iii) not entered into by the debtor as the result of a threat by the
creditor to take any action that cannot be legally taken or that is not
intended to be taken.'; and
(4) in the 3d sentence of subsection (d)--
(A) by striking `of this section' and inserting a comma; and
(B) by inserting after `such agreement' the following:
`or if the consideration for such agreement is based on a wholly unsecured
consumer debt (except for debts owed to creditors defined in section
461(b)(10(A)(iv) of title 12, United States Code) and the debtor has not
waived the debtor's right to a hearing on the agreement in accordance with
subsection (c)(2)(C) of this section'.
SEC. 111. PROMOTION ALTERNATIVE DISPUTE RESOLUTION.
(a) REDUCTION OF CLAIM- Section 502 of title 11, United States Code, is
amended by adding at the end the following:
`(k)(1) The court, on the motion of the debtor and after a hearing, may
reduce a claim filed under this section based in whole on unsecured consumer
debts by not more than 20 percent, if the debtor can prove 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 behalf of the debtor, if--
`(A) such offer was made at least 60 days before the filing of the
petition;
`(B) such offer provided for payment of at least 60 percent of the
amount of the debtor 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 that the proposed
alternative repayment schedule was made in the 60-day period specified in
subparagraph (A) and that the creditor unreasonably refused to consider the
debtor's proposal.'.
(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. 112. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A
DWELLING.
(a) STUDY REQUIRED- During the period beginning 180 days after the date of
enactment of this Act and ending 18 months after the date of the enactment,
the Board of Governors of the Federal Reserve System (in this section referred
to as the `Board') shall conduct a study and submit to Congress a report
(including recommendations for any appropriate legislation) regarding--
(1) whether a consumer engaging in an open-end credit transaction (as
defined pursuant to section 103 of the Truth in lending Act) secured by the
consumer's principal dwelling is provided adequate information under Federal
law, including under section 127A of the Truth in Lending Act, regarding the
tax deductibility of interest paid on such transaction; and
(2) whether a consumer engaging in a closed-end credit transaction (as
defined pursuant to section 103 of the Truth in Lending Act) secured by the
consumer's principal dwelling is provided adequate information regarding the
tax deductibility of interest paid on such transaction.
In conducting such study, the Board shall specifically consider whether
additional disclosures are necessary with respect to such open-end or
closed-end credit transactions in which the amount of the credit extended
exceeds the fair market value of the dwelling.
(b) REGULATIONS- If the Board determines that additional disclosures are
necessary in connection with transactions described in subsection (a), the
Board, pursuant to its authority under the Truth in Lending Act, may
promulgate regulations that would require such additional disclosures. Any
such regulations promulgated by the Board under this section shall not take
effect before the end of the 36-month period after the date of the enactment
of this Act.
SEC. 113. DUAL USE DEBIT CARD.
(a) STUDY REQUIRED- The Board of Governors of the Federal Reserve System
(in this section referred to as the `Board') shall conduct a study of existing
protections provided to consumers to limit their liability for unauthorized
use or a debit card or similar access device.
(b) SPECIFIC CONSIDERATIONS- In conducting the study required by
subsection (a), the Board shall specifically consider the following--
(1) the extent to which existing provisions of section 909 of the
Electronic Fund Transfer Act and the Board's implementing regulations
provide adequate unauthorized use liability protection for consumers;
(2) the extent to which any voluntary industry rules have enhanced the
level of protection afforded consumers in connection with such unauthorized
use liability; and
(3) whether amendments to the Electronic Funds Transfer Act or the
Board's implementing regulations thereto are necessary to provide adequate
protection for consumers in this area.
(c) REPORT AND REGULATIONS- Not later than 2 years after the date of the
enactment of this Act, the Board shall make public a report on its findings
with respect to the adequacy of existing protections afforded consumers with
respect to unauthorized-use liability for debit cards and similar access
devices. If the Board determines that such protections are inadequate, the
Board, pursuant to its authority under the Electronic Funds Transfer Act, may
issue regulations to address such inadequacy. Any regulations issued by the
Board shall not be effective before 36 months after the date of the enactment
of this Act.
SEC. 114. ENHANCED DISCLOSURES UNDER AN OPEN-END CREDIT PLAN.
(a) INITIAL AND ANNUAL MINIMUM PAYMENT DISCLOSURE- Section 127(a) of the
Truth in Lending Act (15 U.S.C. 1637(a)) is amended by adding at the end the
following:
`(9) In the case of any credit or charge card account under an open-end
consumer credit plan on which a minimum monthly or periodic payment will be
required, other than an account described in paragraph (8)--
`(A) the following statement: `The minimum payment amount shown on
your billing statement is the smallest payment which you can make in order
to keep the account in good standing. This payment option is offered as a
convenience and you may make larger payments at any time. Making only the
minimum payment each month will increase the amount of interest you pay
and the length of time it takes to repay your outstanding
balance.';
`(B) if the plan provides that the consumer will be permitted to forgo
making a minimum payment during a specified billing cycle, a statement, if
applicable, that if the consumer chooses to forgo making the minimum
payment, finance charges will continue to accrue; and
`(C) an example, based on an annual percentage rate and method for
determining minimum periodic payments recently in effect for that
creditor, and a $500 outstanding balance, showing the estimated minimum
periodic payment, and the estimated period of time it would take to repay
the $500 outstanding balance if the consumer paid only the minimum
periodic payment on each monthly or periodic statement and obtained no
additional extensions of credit.
`(10) With respect to one billing cycle per calendar year, the creditor
shall transmit the information required under paragraph (9) to each consumer
to whom the creditor is required to transit a statement pursuant to
subsection (b) for such billing cycle. The creditor shall also transmit to
such consumer for such cycle a worksheet prescribed by the Board to assist
the consumer in determining the consumer's household income and debt
obligations.'.
(b) PERIOD 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) The following statement: `The minimum payment amount shown on your
billing statement is the smallest payment which you can make in order to
keep the account in good standing. This payment option is offered as a
convenience and you may make larger payments at any time. Making only the
minimum payment each month will increase the amount of interest you pay and
the length of time it takes to repay your outstanding balance.'.
(c) ENFORCEMENT- Section 127 of the Truth in Lending Act (15 U.S.C. 1637)
is amended by adding at the end the following:
`(h) In promulgating regulations to implement the disclosure of an example
required under subsection (a)(9)(C) and (a)(10), the Board shall set forth a
model disclosure to accompany the example stating that the credit features
shown are only an example which does not obligate the creditor, but is
intended to illustrate the approximate length of time it could take to repay
using the assumptions set forth in subsection (a)(9)(C) without regard to any
other factors that could impact an approximate repayment period, including
other credit features or the consumer's payment or other behavior with respect
to the account. Compliance with the disclosures required under subsection
(a)(9)(C) and (a)(10) shall be enforced exclusively by the Federal agencies
set forth in section 108.'.
(d) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal
Reserve System (in this section referred to as the `Board') shall promulgate
regulations implementing the amendments made by subsections (a) and (b). Such
regulations shall take effect no earlier than the end of the 36-month period
beginning on the date of the enactment of this Act.
(e) STUDY REQUIRED- The Board shall conduct a study to determine whether
consumers have adequate information about borrowing activities which may
result in financial problems. In studying this issue, the Board shall consider
the extent to which--
(1) 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;
(2) minimum periodic payment features offered in connection with
open-end credit plans impact consumer default rates;
(3) consumers always make only the minimum payment throughout the life
of the plan;
(4) consumers are aware that making only minimum payments will increase
the cost and repayment period of an open-end loan; and
(5) the availability of low minimum payment options is a cause of
consumers experiencing financial difficulty.
(f) REPORT TO CONGRESS- Before the end of the 2-year period beginning on
the date of the enactment of this Act, the Board shall submit to Congress a
report containing the findings of the Board in connection with the study
required under subsection (b).
(g) REGULATIONS- The Board shall, by regulation promulgated pursuant to
its authority under the Truth in Lending Act, require additional disclosures
to consumers regarding minimum payment features, including periodic statement
disclosures, if the Board determines that such disclosures are necessary based
on its findings. Any such regulations promulgated by the Board shall not take
effect earlier than January 1, 2001.
SEC. 115. PROTECTION OF SAVINGS EARMARKED FOR THE POSTSECONDARY EDUCATION OF
CHILDREN.
(a) IN GENERAL- Section 522(b) of title 11, United States Code, as amended
by section 330, is amended--
(A) in subparagraph (B), by striking `and' at the end;
(B) in subparagraph (C), by striking the period at the end and
inserting `; and'; and
(C) by adding at the end the following:
`(D) postsecondary education accounts as described as follows:
`(i) except as provided under applicable State law or except as
provided in paragraph (5), any funds placed in a qualified tuition program
(as described in section 529(b) of the Internal Revenue Code of 1986) at
least 365 days before the date of entry of the order for relief and which
has not been pledged or promised to any person in connection with any
extension of credit; or
`(ii) except as provided in paragraph (5), any funds placed in an
education individual retirement account (as defined in section 530(b)(1)
of the Internal Revenue Code of 1986) at least 365 days before the date of
entry of the order for relief and which has not been pledged or promised
to any person in connection with any extension of credit;'; and
(4) by adding at the end the following:
`(5) For purposes of paragraph (3)(D), funds placed in a qualified tuition
program or in an education individual retirement account shall not be exempt
under this subsection--
`(A) unless the debtor has one or more dependent children less than 22
years of age;
`(B) if the amounts in such postsecondary accounts do not exceed the
lesser of $50,000 (in the aggregate) in accounts attributable to each such
dependent child or $100,000 (in the aggregate) attributable to all such
dependent children;
`(C) to the extent such funds contributed to such account exceed $500
per year per child; and
`(D) any individual (other than the dependent child of the debtor to
whom such account is attributable) has any ownership right to such funds, or
the right to obtain ownership in the future of any amount of such funds
(other than upon the death or serious mental impairment of such child), or
direct the application of such funds for any purpose other than the
postsecondary education of such child.'.
SEC. 116. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by adding at the
end the following:
`(i) The willful failure of a creditor to credit payments received under a
plan confirmed under this title (including a plan of reorganization confirmed
under chapter 11 of this title) 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).
`(j)(1) An individual who is injured by the failure of a creditor to
comply with the requirements for a reaffirmation agreement under subsections
(c) and (d), or by any willful violation of the injunction under subsection
(a)(2), shall be entitled to recover--
`(i) the amount of actual damages; or
`(B) costs and attorneys' fees.
`(2) An action to recover for a violation specified in paragraph (1) may
not be brought as a class action.'.
SEC. 117. AUTOMATIC STAY.
Section 362(h) of title 11, United States Code, is amended to read as
follows:
`(h)(1) An individual who is injured by any willful violation of a stay
provided in this section shall be entitled to recover--
`(B) reasonable costs, including attorneys' fees.
`(2) An action to recover for a violation specified in paragraph (1) may
not be brought as a class action.'.
SEC. 118. REINFORCE THE FRESH START.
(a) RESTORATION OF AN EFFECTIVE DISCHARGE- 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. 119. 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 new paragraphs:
`(3) If a single or joint case is filed by or against an individual
debtor under chapter 7, 11, or 13, and if a single or joint case of the
debtor was pending within the previous 1-year period but was dismissed,
other than a case refiled under a chapter other than chapter 7 after
dismissal under section 707(b) of this title, 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 will terminate with respect to the
debtor on the 30th day after the filing of the later case. Upon motion by a
party in interest for continuation of the automatic stay and upon notice and
a hearing, the court may extend the stay in particular cases as to any or
all creditors (subject to such conditions or limitations as the court may
then impose) after notice and a hearing completed before the expiration of
the 30-day period only if the party in interest demonstrates that the filing
of the later case is in good faith as to the creditors to be stayed. A case
is presumptively filed not in good faith (but such presumption may be
rebutted by clear and convincing evidence to the contrary)--
`(A) as to all creditors if--
`(i) more than 1 previous case under any of chapters 7, 11, or 13 in
which the individual was a debtor was pending within such 1-year
period;
`(ii) a previous case under any of chapters 7, 11, or 13 in which
the individual was a debtor was dismissed within such 1-year period,
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 any of chapters 7, 11, or 13 of this title, or any
other reason to conclude that the later case will be concluded, if a
case under chapter 7 of this title, with a discharge, and if a chapter
11 or 13 case, a confirmed plan which will be fully
performed;
`(B) 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.
`(4) If a single or joint case is filed by or against an individual
debtor under this title, and if 2 or more single or joint cases of the
debtor were pending within the previous year but were dismissed, other than
a case refiled under section 707(b) of this title, the stay under subsection
(a) will not go into effect upon the filing of the later case. On request of
a party in interest, the court shall promptly enter an order confirming that
no stay is in effect. If a party in interest requests within 30 days of the
filing of the later case, the court may order the stay to take effect in the
case as to any or all creditors (subject to such conditions or limitations
as the court may impose), after notice and hearing, only if
the party in interest demonstrates that the filing of the later case is in
good faith as to the creditors to be stayed. A stay imposed pursuant to the
preceding sentence will be effective on the date of entry of the order allowing
the stay to go into effect. A case is presumptively not filed in good faith (but
such presumption may be rebutted by clear and convincing evidence to the
contrary)--
`(A) as to all creditors if--
`(i) 2 or more previous cases under this title in which the
individual was a debtor were pending within the 1-year
period;
`(ii) a previous case under this title in which the individual was a
debtor was dismissed within the time period stated in this paragraph
after the debtor failed to file or amend the petition or other documents
as required by this title or the court without substantial excuse (but
mere inadvertence or negligence shall not be substantial excuse unless
the dismissal was caused by the negligence of the debtor's attorney),
failed to pay adequate protection as ordered by the court, or failed to
perform the terms of a plan confirmed by the court; or
`(iii) there has not been a substantial change in the financial or
personal affairs of the debtor since the dismissal of the next most
previous case under this title, or any other reason to conclude that the
later case will not be concluded, if a case under chapter 7, with a
discharge, and if a case under chapter 11 or 13, with a confirmed plan
that will be fully performed; or
`(B) 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. 120. 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 pursuant to 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 that recording,
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.'.
(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 at the end; and
(3) by inserting after paragraph (18) the following:
`(19) 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) of this title as to that property in any prior bankruptcy
case for a period of 2 years after entry of such an order. The debtor in a
subsequent case, however, may move the court for relief from such order
based upon changed circumstances or for other good cause shown, after notice
and a hearing; or
`(20) 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) of this title 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. 121. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(A) in paragraph (4) by striking `and' at the end;
(B) in paragraph (5) by striking the period at the end and inserting
`; and'; and
(C) by adding at the end the following:
`(6) in an individual case under chapter 7 of this title, not retain
possession of personal property as to which a creditor has an allowed claim
for the purchase price secured in whole or in part by an interest in that
personal property unless, in the case of an individual debtor, the debtor
takes 1 of the following actions within 45 days after the first meeting of
creditors under section 341(a)--
`(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, the personal
property affected 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, and after notice and a hearing, that such property is of
consequential value or benefit to the estate.'; and
(2) in section 722 by inserting `in full at the time of redemption'
before the period at the end.
SEC. 122. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT COMPLETE
INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.
Title 11, United States Code, is amended as follows--
(A) by striking `(e), and (f)' in subsection (c) and inserting in lieu
thereof `(e), (f), and (h)'; and
(B) by redesignating subsection (h), as amended by section 117, as
subsection (i) and by inserting after subsection (g) the
following:
`(h) In an individual case pursuant to chapter 7, 11, or 13 the stay
provided by subsection (a) is terminated with respect to property of the
estate securing in whole or in part a claim, or subject to an unexpired lease,
if the debtor fails within the applicable time set by section 521(a)(2) of
this title--
`(1) to file timely any statement of intention required under section
521(a)(2) of this title with respect to that property or to indicate therein
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; or
`(2) 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;
unless the court determines on the motion of the trustee, and after notice
and a hearing, that such property is of consequential value or benefit to the
estate.'; and
(2) in section 521, as amended by sections 121 and 604--
(A) in paragraph (2) by striking `consumer';
(B) in paragraph (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' the second place it appears and
inserting `30-day';
(C) in paragraph (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:
`(c) 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. 123. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
Section 1325(a)(5)(B)(i) of title 11, United States Code, is amended to
read as follows:
`(i) the plan provides that the holder of such claim retain the lien
securing such claim until the earlier of payment of the underlying debt
determined under nonbankruptcy law or discharge under section 1328 of this
title, and that 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'.
SEC. 124. RESTRAINING ABUSIVE PURCHASES ON SECURED CREDIT.
Section 506 of title 11, United States Code, is amended by adding at the
end the following:
`(e) In an individual case under chapter 7, 11, 12, or 13--
`(1) subsection (a) shall not apply to an allowed claim to the extent
attributable in whole or in part to the purchase price of personal property
acquired by the debtor within 5 years of the filing of the petition, except
for the purpose of applying paragraph (3) of this subsection;
`(2) if such allowed claim attributable to the purchase price is secured
only by the personal property so acquired, the value of the personal
property and the amount of the allowed secured claim shall be the sum of the
unpaid principal balance of the purchase price and accrued and unpaid
interest and charges at the contract rate;
`(3) if such allowed claim attributable to the purchase price is secured
by the personal property so acquired and other property, the value of the
security may be determined under subsection (a), but the value of the
security and the amount of the allowed secured claim shall be not less than
the unpaid principal balance of the purchase price of the personal property
acquired and unpaid interest and charges at the contract rate; and
`(4) in any subsequent case under this title that is filed by or against
the debtor in the 2-year period beginning on the date the petition is filed
in the original case, the value of the personal property and the amount of
the allowed secured claim shall be deemed to be not less than the amount
provided under paragraphs (2) and (3).'.
SEC. 125. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code, is amended by adding at
the end the following:
`In the case of an individual debtor under chapters 7 and 13, such value
with respect to personal property securing an allowed claim shall be
determined based on the replacement value of such property as of the date of
filing the petition without deduction for costs of sale or marketing. With
respect to property acquired for personal, family, or household purpose,
replacement value shall mean the price a retail merchant would charge for
property of that kind considering the age and condition of the property at the
time value is determined.'.
SEC. 126. EXEMPTIONS.
Section 522(b)(2)(A) of title 11, United States Code, is amended--
(1) by striking `180' and inserting `730'; and
(2) by striking `, or for a longer portion of such 180-day period than
in any other place'.
SEC. 127. LIMITATION.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (b)(2)(A) by inserting `subject to subsection (n),'
before `any property'; and
(2) by adding at the end the following:
`(n) For purposes of subsection (b)(2)(A) and notwithstanding subsection
(a), the value of an interest in--
`(1) real or personal property that the debtor or a dependent of the
debtor uses as a residence;
`(2) a cooperative that owns property that the debtor or a dependent of
the debtor uses as a residence; or
`(3) a burial plot for the debtor or a dependent of the debtor;
shall be reduced to the extent such value is attributable to any portion
of any property that the debtor disposed of in the 730-day period ending of
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. 128. ROLLING STOCK EQUIPMENT.
(a) IN GENERAL- Section 1168 of title 11, United States Code, is amended
to read as follows:
`Sec. 1168. Rolling stock equipment
`(a)(1) The right of a secured party with a security interest in or of a
lessor or conditional vendor of equipment described in paragraph (2) to take
possession of such equipment in compliance with an equipment security
agreement, lease, or conditional sale contract, and to enforce any of its
other rights or remedies under such security agreement, lease, or conditional
sale contract, to sell, lease, or otherwise retain or dispose of such
equipment, is not limited or otherwise affected by any other provision of this
title or by any power of the court, except that the right to take possession
and enforce those other rights and remedies shall be subject to section 362 of
this title, if--
`(A) before the date that is 60 days after the date of commencement of a
case under this chapter, the trustee, subject to the court's approval,
agrees to perform all obligations of the debtor under such security
agreement, lease, or conditional sale contract; and
`(B) any default, other than a default of a kind described in section
365(b)(2) of this title, under such security agreement, lease, or
conditional sale contract--
`(i) that occurs before the date of commencement of the case and is an
event of default therewith is cured before the expiration of such 60-day
period;
`(ii) that occurs or becomes an event of default after the date of
commencement of the case and before the expiration of such 60-day period
is cured before the later of--
`(I) the date that is 30 days after the date of the default or event
of the default; or
`(II) the expiration of such 60-day period; and
`(iii) that occurs on or after the expiration of such 60-day period is
cured in accordance with the terms of such security agreement, lease, or
conditional sale contract, if cure is permitted under that agreement,
lease, or conditional sale contract.
`(2) The equipment described in this paragraph--
`(A) is rolling stock equipment or accessories used on rolling stock
equipment, including superstructures or racks, that is subject to a security
interest granted by, leased to, or conditionally sold to a debtor; and
`(B) includes all records and documents relating to such equipment that
are required, under the terms of the security agreement, lease, or
conditional sale contract, that is to be surrendered or returned by the
debtor in connection with the surrender or return of such equipment.
`(3) Paragraph (1) applies to a secured party, lessor, or conditional
vendor acting in its own behalf or acting as trustee or otherwise in behalf of
another party.
`(b) The trustee and the secured party, lessor, or conditional vendor
whose right to take possession is protected under subsection (a) may agree,
subject to the court's approval, to extend the 60-day period specified in
subsection (a)(1).
`(c)(1) In any case under this chapter, the trustee shall immediately
surrender and return to a secured party, lessor, or conditional vendor,
described in subsection (a)(1), equipment described in subsection (a)(2), if
at any time after the date of commencement of the case under this chapter such
secured party, lessor, or conditional vendor is entitled pursuant to
subsection (a)(1) to take possession of such equipment and makes a written
demand for such possession of the trustee.
`(2) At such time as the trustee is required under paragraph (1) to
surrender and return equipment described in subsection (a)(2), any lease of
such equipment, and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or conditional sale
contract is an executory contract, shall be deemed rejected.
`(d) With respect to equipment first placed in service on or prior to
October 22, 1994, for purposes of this section--
`(1) the term `lease' includes any written agreement with respect to
which the lessor and the debtor, as lessee, have expressed in the agreement
or in a substantially contemporaneous writing that the agreement is to be
treated as a lease for Federal income tax purposes; and
`(2) the term `security interest' means a purchase-money equipment
security interest.
`(e) With respect to equipment first placed in service after October 22,
1994, for purposes of this section, the term `rolling stock equipment'
includes rolling stock equipment that is substantially rebuilt and accessories
used on such equipment.'.
(b) AIRCRAFT EQUIPMENT AND VESSELS- Section 1110 of title 11, United
States Code, is amended to read as follows:
`Sec. 1110. Aircraft equipment and vessels
`(a)(1) Except as provided in paragraph (2) and subject to subsection (b),
the right of a secured party with a security interest in equipment described
in paragraph (3), or of a lessor or conditional vendor of such equipment, to
take possession of such equipment in compliance with a security agreement,
lease, or conditional sale contract, and to enforce any of its other rights or
remedies, under such security agreement, lease, or conditional sale contract,
to sell, lease, or otherwise retain or dispose of such equipment, is not
limited or otherwise affected by any other provision of this title or by any
power of the court.
`(2) The right to take possession and to enforce the other rights and
remedies described in paragraph (1) shall be subject to section 362 of this
title if--
`(A) before the date that is 60 days after the date of the order for
relief under this chapter, the trustee, subject to the approval of the
court, agrees to perform all obligations of the debtor under such security
agreement, lease, or conditional sale contract; and
`(B) any default, other than a default of a kind specified in section
365(b)(2) of this title, under such security agreement, lease, or
conditional sale contract--
`(i) that occurs before the date of the order is cured before the
expiration of such 60-day period;
`(ii) that occurs after the date of the order and before the
expiration of such 60-day period is cured before the later of--
`(I) the date that is 30 days after the date of the default;
or
`(II) the expiration of such 60-day period; and
`(iii) that occurs on or after the expiration of such 60-day period is
cured in compliance with the terms of such security agreement, lease, or
conditional sale contract, if a cure is permitted under that agreement,
lease, or contract.
`(3) The equipment described in this paragraph--
`(i) an aircraft, aircraft engine, propeller, appliance, or spare part
(as defined in section 40102 of title 49) that is subject to a security
interest granted by, leased to, or conditionally sold to a debtor that, at
the time such transaction is entered into, holds an air carrier operating
certificate issued pursuant to chapter 447 of title 49 for aircraft
capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo; or
`(ii) a documented vessel (as defined in section 30101(1) of title 46)
that is subject to a security interest granted by, leased to, or
conditionally sold to a debtor that is a water carrier that, at the time
such transaction is entered into, holds a certificate of public
convenience and necessity or permit issued by the Department of
Transportation; and
`(B) includes all records and documents relating to such equipment that
are required, under the terms of the security agreement, lease, or
conditional sale contract, to be surrendered or returned by the debtor in
connection with the surrender or return of such equipment.
`(4) Paragraph (1) applies to a secured party, lessor, or conditional
vendor acting in its own behalf or acting as trustee or otherwise in behalf of
another party.
`(b) The trustee and the secured party, lessor, or conditional vendor
whose right to take possession is protected under subsection (a) may agree,
subject to the approval of the court, to extend the 60-day period specified in
subsection (a)(1).
`(c)(1) In any case under this chapter, the trustee shall immediately
surrender and return to a secured party, lessor, or conditional vendor,
described in subsection (a)(1), equipment described in subsection (a)(3), if
at any time after the date of the order for relief under this chapter such
secured party, lessor, or conditional vendor is entitled pursuant to
subsection (a)(1) to take possession of such equipment and makes a written
demand for such possession to the trustee.
`(2) At such time as the trustee is required under paragraph (1) to
surrender and return equipment described in subsection (a)(3), any lease of
such equipment, and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or conditional sale
contract is an executory contract, shall be deemed rejected.
`(d) With respect to equipment first placed in service on or before
October 22, 1994, for purposes of this section--
`(1) the term `lease' includes any written agreement with respect to
which the lessor and the debtor, as lessee, have expressed in the agreement
or in a substantially contemporaneous writing that the agreement is to be
treated as a lease for Federal income tax purposes; and
`(2) the term `security interest' means a purchase-money equipment
security interest.'.
SEC. 129. 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) of this title;
`(2) of the kind specified in paragraph (2), (4), (3)(B), (5), (8), or
(9) of section 523(a) of this title;
`(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. 130. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE- This section may be cited as the `Bankruptcy Judgeship
Act of 1999'.
(b) TEMPORARY JUDGESHIPS-
(1) APPOINTMENTS- The following judgeship positions shall be filled in
the manner prescribed in section 152(a)(1) of title 28, United States Code,
for the appointment of bankruptcy judges provided for in section 152(a)(2)
of such title:
(A) One additional bankruptcy judgeship for the eastern district of
California.
(B) Four additional bankruptcy judgeships for the central district of
California.
(C) One additional bankruptcy judgeship for the southern district of
Florida.
(D) Two additional bankruptcy judgeships for the district of
Maryland.
(E) One additional bankruptcy judgeship for the eastern district of
Michigan.
(F) One additional bankruptcy judgeship for the southern district of
Mississippi.
(G) One additional bankruptcy judgeship for the district of New
Jersey.
(H) One additional bankruptcy judgeship for the eastern district of
New York.
(I) One additional bankruptcy judgeship for the northern district of
New York.
(J) One additional bankruptcy judgeship for the southern district of
New York.
(K) One additional bankruptcy judgeship for the eastern district of
Pennsylvania.
(L) One additional bankruptcy judgeship for the middle district of
Pennsylvania.
(M) One additional bankruptcy judgeship for the western district of
Tennessee.
(N) One additional bankruptcy judgeship for the eastern district of
Virginia.
(2) VACANCIES- The first vacancy occurring in the office of a bankruptcy
judge in each of the judicial districts set forth in paragraph (1)
that--
(A) results from the death, retirement, resignation, or removal of a
bankruptcy judge; and
(B) occurs 5 years or more after the appointment date of a bankruptcy
judge appointed under paragraph (1);
(1) IN GENERAL- The temporary bankruptcy judgeship positions authorized
for the northern district of Alabama, the district of Delaware, the district
of Puerto Rico, the district of South Carolina, and the eastern district of
Tennessee under section 3(a) (1), (3), (7), (8), and (9) of the Bankruptcy
Judgeship Act of 1992 (28 U.S.C. 152 note) are extended until the first
vacancy occurring in the office of a bankruptcy judge in the applicable
district resulting from the death, retirement, resignation, or removal of a
bankruptcy judge and occurring--
(A) 8 years or more after November 8, 1993, with respect to the
northern district of Alabama;
(B) 10 years or more after October 28, 1993, with respect to the
district of Delaware;
(C) 8 years or more after August 29, 1994, with respect to the
district of Puerto Rico;
(D) 8 years or more after June 27, 1994, with respect to the district
of South Carolina; and
(E) 8 years or more after November 23, 1993, with respect to the
eastern district of Tennessee.
(2) APPLICABILITY OF OTHER PROVISIONS- All other provisions of section 3
of the Bankruptcy Judgeship Act of 1992 remain applicable to such temporary
judgeship position.
(d) TECHNICAL AMENDMENT- The first sentence of section 152(a)(1) of title
28, United States Code, is amended to read as follows: `Each bankruptcy judge
to be appointed for a judicial district as provided in paragraph (2) shall be
appointed by the United States court of appeals for the circuit in which such
district is located.'.
(e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES- Section 156 of title 28, United
States Code, is amended by adding at the end the following new subsection:
`(g)(1) In this subsection, the term `travel expenses'--
`(A) means the expenses incurred by a bankruptcy judge for travel that
is not directly related to any case assigned to such bankruptcy judge;
and
`(B) shall not include the travel expenses of a bankruptcy judge
if--
`(i) the payment for the travel expenses is paid by such bankruptcy
judge from the personal funds of such bankruptcy judge; and
`(ii) such bankruptcy judge does not receive funds (including
reimbursement) from the United States or any other person or entity for
the payment of such travel expenses.
`(2) Each bankruptcy judge shall annually submit the information required
under paragraph (3) to the chief bankruptcy judge for the district in which
the bankruptcy judge is assigned.
`(3)(A) Each chief bankruptcy judge shall submit an annual report to the
Director of the Administrative Office of the United States Courts on the
travel expenses of each bankruptcy judge assigned to the applicable district
(including the travel expenses of the chief bankruptcy judge of such
district).
`(B) The annual report under this paragraph shall include--
`(i) the travel expenses of each bankruptcy judge, with the name of the
bankruptcy judge to whom the travel expenses apply;
`(ii) a description of the subject matter and purpose of the travel
relating to each travel expense identified under clause (i), with the name
of the bankruptcy judge to whom the travel applies; and
`(iii) the number of days of each travel described under clause (ii),
with the name of the bankruptcy judge to whom the travel applies.
`(4)(A) The Director of the Administrative Office of the United States
Courts shall--
`(i) consolidate the reports submitted under paragraph (3) into a single
report; and
`(ii) annually submit such consolidated report to Congress.
`(B) The consolidated report submitted under this paragraph shall include
the specific information required under paragraph (3)(B), including the name
of each bankruptcy judge with respect to clauses (i), (ii), and (iii) of
paragraph (3)(B).'.
SEC. 131. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
(a) 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.'.
(b) Section 523(a)(9) of title 11, United States Code, is amended by
inserting `or vessel' after `vehicle'.
SEC. 132. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED STATES CODE.
Section 1325(b)(2) of title 11, United States Code, is amended by
inserting after `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 and which is reasonably necessary
to be expended)'.
SEC. 133. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE STAY PROTECTS THE
DEBTOR.
Section 1301(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) Notwithstanding subsection (c) and except as provided in
subparagraph (B), in any case in which the debtor did not receive the
consideration for the claim held by a creditor, the stay provided by
subsection (a) shall apply to that creditor for a period not to exceed 30 days
beginning on the date of the order for relief, to the extent the creditor
proceeds against--
`(i) the individual that received that consideration; or
`(ii) property not in the possession of the debtor that secures that
claim.
`(B) Notwithstanding subparagraph (A), the stay provided by subsection (a)
shall apply in any case in which the debtor is primarily obligated to pay the
creditor in whole or in part with respect to a claim described in subparagraph
(A) under a legally binding separation or property settlement agreement or
divorce or dissolution decree with respect to--
`(i) an individual described in subparagraph (A)(i); or
`(ii) property described in subparagraph (A)(ii).
`(3) Notwithstanding subsection (c), the stay provided by subsection (a)
shall terminate as of the date of confirmation of the plan, in any case in
which the plan of the debtor provides that the debtor's interest in personal
property subject to a lease with respect to which the debtor is the lessee
will be surrendered or abandoned or no payments will be made under the plan on
account of the debtor's obligations under the lease.'.
SEC. 134. 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 pursuant to section 15A of the Securities Exchange Act of 1934 or
a national securities exchange registered with the Securities and Exchange
Commission pursuant to section 6 of the Securities Exchange Act of
1934;'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as
amended by section 120, is amended--
(1) in paragraph (19) by striking `or' at the end;
(2) in paragraph (20) by striking the period at the end and a inserting
`; or'; and
(3) by inserting after paragraph (20) the following:
`(21) under subsection (a), of the commencement or continuation of an
investigation or action by a securities self regulatory organization to
enforce such organization's regulatory power; of 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 of 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. 135. 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), consumer debts owed to a
single creditor and aggregating more than $250 for `luxury goods or
services' incurred by an individual debtor on or within 90 days before the
order for relief under this title, or cash advances aggregating more than
$250 that are extensions of consumer credit under an open end credit plan
obtained by an individual debtor on or within 90 days before the order for
relief under this title, are presumed to be nondischargeable; and
`(ii) for purposes of this subparagraph--
`(I) 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; and
`(II) the term `an extension of consumer credit under an open end
credit plan' has the same meaning such term has for purposes of the
Consumer Credit Protection Act;'.
SEC. 136. 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) of this title is automatically
terminated.
`(2) In the case of an individual under chapter 7, the debtor may notify
the creditor in writing that the debtor desires to assume the lease. Upon
being so notified, the creditor may, at its option, notify the debtor that it
is willing to have the lease assumed by the debtor and may condition such
assumption on cure of any outstanding default on terms set by the contract. If
within 30 days of such notice 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. The stay under section 362 of this title and the
injunction under section 524(a)(2) of this title shall not be violated by
notification of the debtor and negotiation of cure under this subsection.
`(3) In a case under chapter 11 of this title in which the debtor is an
individual and in a case under chapter 13 of this title, 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 of this title and any stay under section 1301 is automatically
terminated with respect to the property subject to the lease.'.
SEC. 137. ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED
CREDITORS.
(a) IN GENERAL- Chapter 13 of title 11, United States Code, is amended by
adding after section 1307 the following:
`Sec. 1307A. Adequate protection in chapter 13 cases
`(a)(1)(A) On or before the date that is 30 days after the filing of a
case under this chapter, the debtor shall make cash payments in an amount
determined under paragraph (2)(A), to--
`(i) any lessor of personal property; and
`(ii) any creditor holding a claim secured by personal property to the
extent that the claim is attributable to the purchase of that property by
the debtor.
`(B) The debtor or the plan shall continue making the adequate protection
payments until the earlier of the date on which--
`(i) the creditor begins to receive actual payments under the plan;
or
`(ii) the debtor relinquishes possession of the property referred to in
subparagraph (A) to--
`(I) the lessor or creditor; or
`(II) any third party acting under claim of right, as
applicable.
`(2) The payments referred to in paragraph (1)(A) shall be the contract
amount.
`(b)(1) Subject to the limitations under paragraph (2), the court may,
after notice and hearing, change the amount and timing of the dates of payment
of payments made under subsection (a).
`(2)(A) The payments referred to in paragraph (1) shall be payable not
less frequently than monthly.
`(B) The amount of payments referred to in paragraph (1) shall not be less
than the amount of any weekly, biweekly, monthly, or other periodic payment
schedules as payable under the contract between the debtor and creditor.
`(c) Notwithstanding section 1326(b), the payments referred to in
subsection (a)(1)(A) shall be continued in addition to plan payments under a
confirmed plan until actual payments to the creditor begin under that plan, if
the confirmed plan provides--
`(1) for payments to a creditor or lessor described in subsection
(a)(1); and
`(2) for the deferral of payments to such creditor or lessor under the
plan until the payment of amounts described in section 1326(b).
`(d) Notwithstanding sections 362, 542, and 543, a lessor or creditor
described in subsection (a) may retain possession of property described in
that subsection that was obtained in accordance with applicable law before the
date of filing of the petition until the first payment under subsection
(a)(1)(A) is received by the lessor or creditor.
`(e) On or before 60 days after the filling 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 each creditor or lessor 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.'.
(b) CLERICAL AMENDMENT- The table of sections at the beginning of chapter
13 of title 11, United States Code, is amended by inserting after the item
relating to section 1307 the following:
`1307A. Adequate protection in chapter 13 cases.'.
SEC. 139. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended by sections 120
and 134, is amended--
(1) in paragraph (20), by striking `or' at the end;
(2) in paragraph (21), by striking the period at the end and inserting a
semicolon; and
(3) by inserting after paragraph (21) the following:
`(22) under subsection (a) of any transfer that is not avoidable under
section 544 of this title and that is not avoidable under section 549 of
this title;
`(23) under subsection (a)(3), of the continuation of any eviction,
unlawful detainer action, or similar proceeding by a lessor against a debtor
involving residential real property in which the debtor resides as a tenant
under a rental agreement and the debtor has not paid rent to the lessor
pursuant to the terms of the lease agreement or applicable State law after
the commencement and during the course of the case;
`(24) under subsection (a)(3), of the commencement or continuation of
any eviction, unlawful detainer action, or similar proceeding by a lessor
against a debtor involving residential real property in which the debtor
resides as a tenant under a rental agreement that has terminated pursuant to
the lease agreement or applicable State law;
`(25) under subsection (a)(3), of any eviction, unlawful detainer
action, or similar proceeding, if the debtor has previously filed within the
last year and failed to pay post-petition rent during the course of that
case; or
`(26) under subsection (a)(3), of eviction actions based on endangerment
to property or person or the use of illegal drugs.'.
SEC. 140. EXTEND 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 adding at the end the following:
`(f) Notwithstanding subsections (a) and (b), the court shall not grant a
discharge of all debts provided for by the plan or disallowed under section
502 of this title if the debtor has received a discharge in any case filed
under this title within 5 years of the order for relief under this
chapter.'.
SEC. 141. 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 that is--
`(A) owed to or recoverable by--
`(i) a spouse, former spouse, or child of the debtor or that child's
legal guardian; 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, 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
solely for the purpose of collecting the debt.'.
SEC. 142. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is amended--
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through (6) as paragraphs (2)
through (7), respectively;
(3) in paragraph (2), as redesignated, by striking `First' and inserting
`Second';
(4) in paragraph (3), as redesignated, by striking `Second' and
inserting `Third';
(5) in paragraph (4), as redesignated, by striking `Third' and inserting
`Fourth';
(6) in paragraph (5), as redesignated, by striking `Fourth' and
inserting `Fifth';
(7) in paragraph (6), as redesignated, by striking `Fifth' and inserting
`Sixth';
(8) in paragraph (7), as redesignated, by striking `Sixth' and inserting
`Seventh'; and
(9) by inserting before paragraph (2), as redesignated, the
following:
`(1) First, allowed claims for domestic support obligations to be paid in
the following order on the condition that funds received under this paragraph
by a governmental unit in a case under this title be applied:
`(A) Claims that, as of the date of entry of the order for relief, are
owed directly to a spouse, former spouse, or child of the debtor, or the
parent of such child, without regard to whether the claim is filed by the
spouse, former spouse, child, or parent, or is filed by a governmental unit
on behalf of that person.
`(B) Claims that, as of the date of entry of the order for relief, are
assigned by a spouse, former spouse, child of the debtor, or the parent of
that child to a governmental unit or are owed directly to a governmental
unit under applicable nonbankruptcy law.'.
SEC. 143. 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 become
payable after the date on which the petition is filed.';
(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 become payable
after the date on which the petition is filed.'; and
(3) in section 1328(a), as amended by section 129, in the matter
preceding paragraph (1), by inserting `, and with respect to a debtor who is
required by a judicial or administrative order to pay a domestic support
obligation, 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 or after the petition was filed) have been paid' after
`completion by the debtor of all payments under the plan'.
SEC. 144. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b) of title 11, United States Code, as amended by sections
120, 134, and 139, is amended--
(1) by striking paragraph (2) and inserting the following:
`(2) under subsection (a)--
`(A) of the commencement or continuation of an action or proceeding
for--
`(i) the establishment of paternity as a part of an effort to
collect domestic support obligations; or
`(ii) the establishment or modification of an order for domestic
support obligations; or
`(B) the collection of a domestic support obligation from property
that is not property of the estate;';
(2) in paragraph (25), by striking `or' at the end;
(3) in paragraph (26), by striking the period at the end and inserting a
semicolon; and
(4) by inserting after paragraph (26) the following:
`(27) under subsection (a) with respect to the withholding of income
pursuant to an order as specified in section 466(b) of the Social Security
Act (42 U.S.C. 666(b)); or
`(28) under subsection (a) with respect to--
`(A) the withholding, suspension, or restriction of drivers' licenses,
professional and occupational licenses, and recreational licenses pursuant
to State law, as specified in section 466(a)(16) of the Social Security
Act (42 U.S.C. 666(a)(16)) or with respect to the reporting of overdue
support owed by an absent parent to any consumer reporting agency as
specified in section 466(a)(7) of the Social Security Act (42 U.S.C.
666(a)(7));
`(B) the interception of tax refunds, as specified in sections 464 and
466(a)(3) of the Social Security Act (42 U.S.C. 664 and 666(a)(3));
or
`(C) the enforcement of medical obligations as specified under title
IV of the Social Security Act (42 U.S.C. 601 et seq.).'.
SEC. 145. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY, MAINTENANCE, AND
SUPPORT.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a), by striking paragraph (5) and inserting the
following:
`(5) for a domestic support obligation;';
(2) in subsection (c), by striking `(6), or (15)' and inserting `or
(6)'; and
(3) in paragraph (15), by striking `governmental unit' and all through
the end of the paragraph and inserting a semicolon.
SEC. 146. 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);'; and
(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'.
SEC. 147. 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; or'.
SEC. 148. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
Section 522(f)(1)(B) of title 11, United States Code, is amended as
follows:
(1) by inserting `(i)' after `(B)'; and
(2) by striking `(i)' and inserting `(aa)'; and
(3) by striking `(ii)' and inserting `(bb)';
(4) by striking `(iii)' and inserting `(cc)';
(5) by adding at the end thereof the following:
`(ii) `household goods' shall mean for the purposes of this
subparagraph (B) clothing; furniture; appliances; one radio; one
television; one VCR; linens; china; crockery; kitchenware; educational
materials and educational equipment primarily for the use of minor
dependent children of the debtor, but only one personal computer only if
used primarily for the education or entertainment of such minor children;
medical equipment and supplies; furniture exclusively for the use of minor
children, elderly or disabled dependents of the debtor; and personal
effects (including wedding rings and the toys and hobby equipment of minor
dependent children) of the debtor and his or her dependents:
Provided, That the following are not included within the scope of
the term `household goods':
`(aa) works of art (unless by or of the debtor or his or her
dependents);
`(bb) electronic entertainment equipment (except one television, one
radio, and one VCR);
`(cc) items acquired as antiques;
`(dd) jewelry (except wedding rings);
`(ee) 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.'.
SEC. 149. NONDISCHARGEABLE DEBTS.
Section 523(a) of title 11, United States Code, is amended by inserting
after paragraph (14) the following:
`(14A) incurred to pay a debt that is nondischargeable by reason of
section 727, 1141, 1228(a), 1228(b), or 1328(b), or any other provision of
this subsection, if the debtor incurred the debt to pay such a
nondischargeable debt with the intent to discharge in bankruptcy the
newly-created debt, except that all debts incurred to pay nondischargeable
debts, without regard to intent, are nondischargeable if incurred within 90
days of the filing of the petition;'.
TITLE II--DISCOURAGING BANKRUPTCY ABUSE
SEC. 201. REENACTMENT OF CHAPTER 12.
(a) REENACTMENT- Chapter 12 of title 11 of the United States Code, as in
effect on March 31, 1999, is hereby reenacted.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
on March 31, 1999.
SEC. 202. 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. 203. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) IN GENERAL- Section 522 of title 11, United States Code, is
amended--
(i) by striking `(2)(A) any property' and inserting:
`(3) Property listed in this paragraph is--
(ii) in subparagraph (A), by striking `and' at the end;
(iii) in subparagraph (B), by striking the period at the end and
inserting `; and'; and
(iv) 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.';
(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) in the matter preceding paragraph (2)--
(i) by striking `(b)' and inserting `(b)(1)';
(ii) by striking `paragraph (2)' both places it appears and
inserting `paragraph (3)';
(iii) by striking `paragraph (1)' each place it appears and
inserting `paragraph (2)'; and
(iv) by striking `Such property is--'; and
(D) by adding at the end of the subsection the following:
`(4) For purposes of paragraph (3)(C), the following shall apply:
`(A) If the retirement funds are in a retirement fund that has received
a favorable determination pursuant to 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 pursuant to 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) the retirement fund is in substantial compliance with the
applicable requirements of the Internal Revenue Code of 1986.
`(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, pursuant to section 401(a)(31)
of the Internal Revenue Code of 1986, or otherwise, shall not cease to
qualify for exemption under paragraph (3)(C) 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) 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
(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, as
amended by sections 120, 134, 139, and 144 is amended--
(1) in paragraph (27), by striking `or' at the end;
(2) in paragraph (28), by striking the period and inserting `;
or';
(3) by inserting after paragraph (28) the following:
`(29) under subsection (a), of withholding of income from a debtor's
wages and collection of amounts withheld, pursuant to the debtor's agreement
authorizing that withholding and collection for the benefit of a pension,
profit-sharing, stock bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986
that is sponsored by the employer of the debtor, or an affiliate, successor,
or predecessor of such employer--
`(A) to the extent that the amounts withheld and collected are used
solely for payments relating to a loan from a plan that satisfies the
requirements of section 408(b)(1) of the Employee Retirement Income
Security Act of 1974 or is subject to section 72(p) of the Internal
Revenue Code of 1986; or
`(B) in the case of a loan from a thrift savings plan described in
subchapter III of title 5, that satisfies the requirements of section
8433(g) of such title.'; and
(4) by adding at the end of the flush material following paragraph (19)
the following: `Paragraph (19) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under a loan made during the
1-year period preceding the filing of a petition. Nothing in paragraph (19)
may be construed to provide that any loan made under a governmental plan
under section 414(d), or a contract or account under section 403(b), of the
Internal Revenue Code of 1986 constitutes a claim or a debt under this
title.'.
(c) EXCEPTIONS TO DISCHARGE- Section 523(a) of title 11, United States
Code, is amended--
(1) by striking `or' at the end of paragraph (17);
(2) by striking the period at the end of paragraph (18) and inserting `;
or'; and
(3) 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, pursuant to--
`(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 title 5, that satisfies the requirements of section 8433(g) of such
title.
Paragraph (19) does not apply to any amount owed to a plan referred to in
that paragraph that is incurred under a loan made during the 1-year period
preceding the filing of a petition. Nothing in paragraph (19) may be construed
to provide that any loan made under a governmental plan under section 414(d),
or a contract or account under section 403(b), of the Internal Revenue Code of
1986 constitutes a claim or a debt under this title.'.
(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) of this title.'.
SEC. 204. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11, United
States Code, are amended by striking `10' each place it appears and inserting
`30'.
SEC. 205. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
Section 365(d)(4) of title 11, United States Code, is amended to read as
follows:
`(4)(A) Subject to subparagraph (B), in any case under any chapter of this
title, an unexpired lease of nonresidential real property under which the
debtor is the lessee shall be deemed rejected and the trustee shall
immediately surrender that nonresidential real property to the lessor if the
trustee does not assume or reject the unexpired lease by the earlier of--
`(i) the date that is 180 days after the date of the order for relief;
or
`(ii) the date of the entry of an order confirming a plan.
`(B) The court may extend the period determined under subparagraph (A)
only upon a motion of the lessor.'.
SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.
Section 1102(a)(2) of title 11, United States Code, is amended by
inserting before the first sentence the following: `On its own motion or on
request of a party in interest, and after notice and hearing, the court may
order a change in 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.'.
SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.
Section 546 of title 11, United States Code, is amended by inserting at
the end thereof:
`(I) Notwithstanding section 545 (2) and (3) of this title, the trustee
may not avoid a warehouseman's lien for storage, transportation or other
costs incidental to the storage and handling of goods, as provided by
section 7-209 of the Uniform Commercial Code.'.
SEC. 208. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code, is amended by
striking `20' and inserting `45'.
SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11, UNITED STATES CODE.
Section 330(a) of title 11, United States Code, is amended--
(1) in subsection (3)(A) after the word `awarded', by inserting `to an
examiner, chapter 11 trustee, or professional person'; and
(2) by adding at the end of subsection (3)(A) the following:
`(3)(B) In determining the amount of reasonable compensation to be
awarded a trustee, the court shall treat such compensation as a commission
based on the results achieved.'.
SEC. 210. 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. 211. PREFERENCES.
Section 547(c) of title 11, United States Code, is amended--
(1) by amending paragraph (2) to read as follows:
`(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 (7) by striking `or' at the end;
(3) in paragraph (8) by striking the period at the end and inserting `;
or'; and
(4) 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 $5000.'.
SEC. 212. 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. 213. 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 (1), on';
and
(2) by adding at the end the following:
`(2)(A) Such 120-day period may not be extended beyond a date that is 18
months after the date of the order for relief under this chapter.
`(B) Such 180-day period may not be extended beyond a date that is 20
months after the date of the order for relief under this chapter.'.
SEC. 214. 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, and until such time as
the debtor or trustee has surrendered any legal, equitable or possessory
interest in such unit, such corporation, or such lot,'.
SEC. 215. CLAIMS RELATING TO INSURANCE DEPOSITS IN CASES ANCILLARY TO
FOREIGN PROCEEDINGS.
Section 304 of title 11, United States Code, is amended to read as
follows:
`Sec. 304. Cases ancillary to foreign proceedings
`(a) For purposes of this section--
`(1) the term `domestic insurance company' means a domestic insurance
company, as such term is used in section 109(b)(2);
`(2) the term `foreign insurance company' means a foreign insurance
company, as such term is used in section 109(b)(3);
`(3) the term `United States claimant' means a beneficiary of any
deposit referred to in subsection (b) or any multibeneficiary trust referred
to in subsection (b);
`(4) the term `United States creditor' means, with respect to a foreign
insurance company--
`(i) a United States claimant; or
`(ii) any business entity that operates in the United States and that
is a creditor; and
`(5) the term `United States policyholder' means a holder of an
insurance policy issued in the United States.
`(b) The court may not grant relief under chapter 15 of this title 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.'.
SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.
(a) EXECUTORY CONTRACTS AND UNEXPIRED LEASES- Section 365 of title 11,
United States Code, is amended--
(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--
`(i) 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
(excluding executory contracts that transfer a right or interest under a
filed or issued patent, copyright, trademark, trade dress, or trade
secret), if it is impossible for the trustee to cure such default by
performing nonmonetary acts at and after the time of assumption;
or
`(ii) 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 executory contract, if it is
impossible for the trustee to cure such default by performing nonmonetary
acts at and after the time of assumption and if the court determines,
based on the equities of the case, that this subparagraph should not apply
with respect to such default;'; and
(B) by amending paragraph (2)(D) to read as follows:
`(D) the satisfaction of any penalty rate or penalty provision relating
to a default arising from a failure to perform nonmonetary obligations under
an executory contract (excluding executory contracts that transfer a right
or interest under a filed or issued patent, copyright, trademark, trade
dress, or trade secret) or under an unexpired lease of real or personal
property.';
(A) in paragraph (2) by adding `or' at the end;
(B) in paragraph (3) by striking `; or' at the end and inserting a
period; and
(C) by striking paragraph (4);
(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)(1)(A) 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, compensates the holder of such claim or such
interest (other than the debtor or an insider) for any actual pecuniary
loss incurred by such holder as a result of such failure; and'.
TITLE III--GENERAL BUSINESS BANKRUPTCY PROVISIONS
SEC. 301. 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. 302. MISCELLANEOUS IMPROVEMENTS.
(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 90-day period preceding the date of
filing of the petition of that individual, received credit counseling,
including, at a minimum, participation in an individual or group briefing that
outlined the opportunities for available credit counseling and assisted that
individual in performing an initial budget analysis, through a credit
counseling program (offered through an approved credit counseling service
described in section 111(a)).
`(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 credit
counseling services for that district are not reasonably able to provide
adequate services to the additional individuals who would otherwise seek
credit counseling from those programs 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 one year after the date of that determination, and not less
frequently than every year thereafter.
`(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 credit counseling service, 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.'.
(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.'.
(c) CHAPTER 13 DISCHARGE- Section 1328 of title 11, United States Code, is
amended by adding at the end the following:
`(f) 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.
`(g) Subsection (f) 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.
`(h) Each United States trustee or bankruptcy administrator that makes a
determination described in subsection (g) 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, as
amended by sections 121, 604, and 122, is amended by adding at the end the
following:
`(d) In addition to the requirements under subsection (a), an individual
debtor shall file with the court--
`(1) a certificate from the credit counseling service that provided the
debtor services under section 109(h); and
`(2) a copy of the debt repayment plan, if any, developed under section
109(h) through the credit counseling service referred to in paragraph
(1).'.
(e) EXCEPTIONS TO DISCHARGE- Section 523(d) of title 11, United States
Code, as amended by section 202 of this Act, is amended by striking paragraph
(3)(A)(i) and inserting the following:
`(i) within the applicable period of time prescribed under section
109(h), the debtor received credit counseling through a credit counseling
program in accordance with section 109(h); and'.
(1) IN GENERAL- Chapter 1 of title 11, United States Code, is amended by
adding at the end the following:
`Sec. 111. Credit counseling services; financial management instructional
courses
`(a) The clerk of each district shall maintain a list of credit counseling
services that provide 1 or more programs described in section 109(h) and a
list of instructional courses concerning personal financial management that
have been approved by--
`(1) the United States trustee; or
`(2) the bankruptcy administrator for the district.'.
(2) CLERICAL AMENDMENT- The table of sections at the beginning of
chapter 1 of title 11, United States Code, is amended by adding at the end
the following:
`111. Credit counseling services; financial management instructional
courses.'.
(g) DEFINITIONS- Section 101 of title 11, United States Code, as amended
by section 317 of this Act, is amended--
(1) by inserting after paragraph (13) the following:
`(13A) `debtor's principal residence'--
`(A) means a residential structure, including incidental property,
without regard to whether that structure is attached to real property;
and
`(B) includes an individual condominium or cooperative unit;';
and
(2) by inserting after paragraph (27A), as added by section 318 of this
Act, the following:
`(27B) `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;'.
(h) LIMITATION- Section 362 of title 11, United States Code, is amended by
adding at the end the following:
`(j) If 1 case commenced under chapter 7, 11, or 13 of this title is
dismissed due to the creation of a debt repayment plan, then for purposes of
section 362(c)(3) of this title the subsequent case commenced under any such
chapter shall not be presumed to be filed not in good faith.'.
SEC. 303. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United States Trustees, and
Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is amended--
(1) in subparagraph (A), in the matter following clause (ii), by
striking `or October 1, 2002, whichever occurs first'; and
(2) in subparagraph (F)--
(i) in subclause (II), by striking `or October 1, 2002, whichever
occurs first'; and
(ii) in the matter following subclause (II), by striking `October 1,
2003, or'; and
(B) in clause (ii), in the matter following subclause (II)--
(i) by striking `before October 1, 2003, or'; and
(ii) by striking `, whichever occurs first'.
TITLE IV--SMALL BUSINESS BANKRUPTCY PROVISIONS
SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125(f) of title 11, United States Code, is amended to read as
follows:
`(f) Notwithstanding subsection (b), in a small business case--
`(1) 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;
`(2) the court may determine that the plan itself provides adequate
information and that a separate disclosure statement is not necessary;
`(3) the court may approve a disclosure statement submitted on standard
forms approved by the court or adopted pursuant to section 2075 of title 28;
and
`(4)(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 less 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. 402. 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' means--
`(A) a person (including affiliates of such person that are also
debtors under this title) 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 $4,000,000 (excluding debts owed to
1 or more affiliates or insiders) a case in which the United States
trustee has appointed under section 1102(a)(1) of this title a committee
of unsecured creditors that `the court has determined' is sufficiently
active and representative to provide effective oversight of the debtor,
except that if a group of affiliated debtors has aggregate noncontingent
liquidated secured and unsecured debts greater than $4,000,000 (excluding
debt owed to 1 or more affiliates or insiders), then no member of such
group is a small business debtor;'.
(b) EFFECT OF DISCHARGE- Section 524 of title 11, United States Code, as
amended by section 402, is amended by adding at the end the following:
`(k)(1) An individual who is injured by the willful failure of a creditor
to substantially comply with the requirements specified in subsections (c) and
(d), or by any willful violation of the injunction operating under subsection
(a)(2), shall be entitled to recover--
`(i) the amount of actual damages; or
`(B) costs and attorneys' fees.
`(2) An action to recover for a violation specified in paragraph (1) may
not be brought as a class action.'.
(c) CONFORMING AMENDMENT- Section 1102(a)(3) of title 11, United States
Code, is amended by inserting `debtor' after `small business'.
SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
The Advisory Committee on Bankruptcy Rules of the Judicial Conference of
the United States shall, within a reasonable period of time after the date of
the enactment of this Act, 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. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(a) REPORTING REQUIRED- (1) Title 11 of the United States Code is amended
by inserting after section 307 the following:
`Sec. 308. Debtor reporting requirements
`A small business debtor shall file periodic financial and other reports
containing information including--
`(1) the debtor's profitability, that is, approximately how much money
the debtor has been earning or losing during current and recent fiscal
periods;
`(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) whether the debtor is--
`(A) in compliance in all material respects with postpetition
requirements imposed by this title and the Federal Rules of Bankruptcy
Procedure; and
`(B) timely filing tax returns and paying taxes and other
administrative claims when due, and, if not, what the failures are and
how, at what cost, and when the debtor intends to remedy such failures;
and
`(5) 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) The table of sections of 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 pursuant to
section 2075, 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. 405. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS- The Advisory Committee on Bankruptcy
Rules of the Judicial Conference of the United States shall propose for
adoption amended Federal Rules of Bankruptcy Procedure and Official Bankruptcy
Forms to be used by small business debtors to file periodic financial and
other reports containing information, including information relating to--
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements; and
(3) whether the debtor is timely filing tax returns and paying taxes and
other administrative claims when due.
(b) PURPOSE- The rules and forms proposed under subsection (a) shall be
designed to achieve a practical balance between--
(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 its financial condition and plan its
future.
SEC. 406. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES IN CHAPTER 11 CASES- Title 11 of the United States Code is
amended by inserting after section 1114 the following:
`Sec. 1115. 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
within 3 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 of this title unless the court waives this
requirement after notice and hearing, upon a finding of extraordinary and
compelling circumstances;
`(3) timely file all schedules and statements of financial affairs,
unless the court, after notice and a hearing, grants an extension, which
shall not extend
such time period to a date later than 30 days after the date of the order for
relief, absent extraordinary and compelling circumstances;
`(4) file all postpetition financial and other reports required by the
Federal Rules of Bankruptcy Procedure or by local rule of the district
court;
`(5) subject to section 363(c)(2) of this title, maintain insurance
customary and appropriate to the industry;
`(6)(A) timely file tax returns;
`(B) subject to section 363(c)(2) of this title, timely pay all
administrative expense tax claims, except those being contested by
appropriate proceedings being diligently prosecuted; and
`(C) subject to section 363(c)(2) of this title, establish 1 or more
separate deposit accounts not later than 10 business days after the date of
order for relief (or as soon thereafter as possible if all banks contacted
decline the business) and deposit therein, not later than 1 business day
after receipt thereof, all taxes payable for periods beginning after the
date the case is commenced that are collected or withheld by the debtor for
governmental units unless the court waives this requirement after notice and
hearing, upon a finding of extraordinary and compelling circumstances;
and
`(7) allow the United States trustee, or its designated representative,
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) TECHNICAL AMENDMENT- The table of sections of chapter 11, United
States Code, is amended by inserting after the item relating to section 1114
the following:
`1115. Duties of trustee or debtor in possession in small business
cases.'.
SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121(e) of title 11, United States Code, is amended to read as
follows:
`(e) In a small business case--
`(1) only the debtor may file a plan until after 90 days after the date
of the order for relief, unless shortened on request of a party in interest
made during the 90-day period, or unless extended as provided by this
subsection, after notice and hearing the court, for cause, orders
otherwise;
`(2) the plan, and any necessary disclosure statement, shall be filed
not later than 90 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) of this title, 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 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. 408. PLAN CONFIRMATION DEADLINE.
Section 1129 of title 11, United States Code, is amended by adding at the
end the following:
`(e) In a small business case, the plan shall be confirmed not later than
150 days after the date of the order for relief unless such 150-day period is
extended as provided in section 1121(e)(3) of this title.'.
SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.
Section 105(d) of title 11, United States Code, is amended--
(1) in paragraph (2)(B)(vi) by striking the period at the end and
inserting `; and'; and
(2) by adding at the end the following:
`(3) in a small business case, not extend the time periods specified in
sections 1121(e) and 1129(e) of this title except as provided in section
1121(e)(3) of this title.'.
SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.
(a) DUTIES OF THE UNITED STATES TRUSTEE- Section 586(a) of title 28,
United States Code, is amended--
(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;';
(2) in paragraph (6) by striking `and' at the end;
(3) in paragraph (7) by striking the period at the end and inserting `;
and'; and
(4) by inserting after paragraph (7) the following:
`(8) 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
begin to investigate the debtor's viability, inquire about the debtor's
business plan, explain the debtor's obligations to file monthly operating
reports and other required reports, attempt to develop an agreed
scheduling order, and inform the debtor of other obligations;
`(B) when 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
`(9) in cases 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 to the court for relief.'.
SEC. 411. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is amended--
(1) in the matter preceding paragraph (1) by striking `, may';
(2) by amending paragraph (1) to read as follows:
`(1) shall hold such status conferences as are necessary to further the
expeditious and economical resolution of the case; and'; and
(3) in paragraph (2) by striking `unless inconsistent with another
provision of this title or with applicable Federal Rules of Bankruptcy
Procedure,' and inserting `may'.
SEC. 412. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is amended--
(1) in subsection (i) as so redesignated by section 124--
(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, then recovery
under paragraph (1) against such entity shall be limited to actual damages.';
and
(2) by inserting after subsection (i), as redesignated by section 124,
the following:
`(j) The filing of a petition under chapter 11 of this title operates as a
stay of the acts described in subsection (a) only in an involuntary case
involving no collusion by the debtor with creditors and in which the
debtor--
`(1) is a debtor in a small business case pending at the time the
petition is filed;
`(2) was a debtor in a small business case which 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;
`(3) 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
`(4) is an entity that has succeeded to substantially all of the assets
or business of a small business debtor described in subparagraph (A), (B),
or (C); unless the debtor proves, by a preponderance of the evidence, that
the filing of such petition resulted from circumstances beyond the control
of the debtor not foreseeable at the time the case then pending was filed;
and that it is more likely than not that the court will confirm a feasible
plan, but not a liquidating plan, within a reasonable time.'.
SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT OF
TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION- Section 1112(b) of title
11, United States Code, is amended to read as follows:
`(b)(1) Except as provided in paragraph (2), in subsection (c), and in
section 1104(a)(3) of this title, on request of a party in interest, and after
notice and a hearing, the court shall convert a case under this chapter to a
case under chapter 7 of this title or dismiss a case under this chapter,
whichever is in the best interest of creditors and the estate, if the movant
establishes cause.
`(2) The relief provided in paragraph (1) shall not be granted if the
debtor or another party in interest objects and establishes, by a
preponderance of the evidence that--
`(A) it is more likely than not that a plan will be confirmed within a
time as fixed by this title or by order of the court entered pursuant to
section 1121(e)(3), or within a reasonable time if no time has been fixed;
and
`(B) if the reason is an act or omission of the debtor that--
`(i) there exists a reasonable justification for the act or omission;
and
`(ii) the act or omission will be cured within a reasonable time fixed
by the court not to exceed 30 days after the court decides the motion,
unless the movant expressly consents to a continuance for a specific
period of time, or compelling circumstances beyond the control of the
debtor justify an extension.
`(3) For purposes of this subsection, cause includes--
`(A) substantial or continuing loss to or diminution of the
estate;
`(B) gross mismanagement of the estate;
`(C) failure to maintain appropriate insurance;
`(D) unauthorized use of cash collateral harmful to 1 or more
creditors;
`(E) failure to comply with an order of the court;
`(F) failure timely to satisfy any filing or reporting requirement
established by this title or by any rule applicable to a case under this
chapter;
`(G) failure to attend the meeting of creditors convened under section
341(a) of this title or an examination ordered under rule 2004 of the
Federal Rules of Bankruptcy Procedure;
`(H) failure timely to provide information or attend meetings reasonably
requested by the United States trustee;
`(I) failure timely to pay taxes due after the date of the order for
relief or to file tax returns due after the order for relief;
`(J) failure to file a disclosure statement, or to file or confirm a
plan, within the time fixed by this title or by order of the court;
`(K) failure to pay any fees or charges required under chapter 123 of
title 28;
`(L) revocation of an order of confirmation under section 1144 of this
title;
`(M) inability to effectuate substantial consummation of a confirmed
plan;
`(N) material default by the debtor with respect to a confirmed plan;
and
`(O) termination of a plan by reason of the occurrence of a condition
specified in the plan.
`(4) The court shall commence the hearing on any motion under this
subsection not later than 30 days after filing of the motion, and shall decide
the motion within 15 days after commencement of the hearing, unless the movant
expressly consents to a continuance for a specific period of time or
compelling circumstances prevent the court from meeting the time limits
established by this paragraph.'.
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF TRUSTEE- Section 1104(a) of
title 11, United States Code, is amended--
(1) in paragraph (1) by striking `or' at the end;
(2) in paragraph (2) by striking the period at the end and inserting `;
or'; and
(3) by adding at the end the following:
`(3) if grounds exist to convert or dismiss the case under section 1112
of this title, but the court determines that the appointment of a trustee is
in the best interests of creditors and the estate.'.
SEC. 414. STUDY OF OPERATION OF TITLE 11 OF THE UNITED STATES CODE WITH
RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of the enactment of this Act, the
Administrator of the Small Business Administration, in consultation with the
Attorney General, the Director of the Administrative Office of United States
Trustees, and the Director of the Administrative Office of the United States
Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that cause small businesses,
especially sole proprietorships, to become debtors in cases under title 11
of the 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. 415. 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 amending subparagraph (B) to read as follows:
`(B) the debtor has commenced monthly payments (which payments may, in
the debtor's sole discretion, notwithstanding section 363(c)(2) of this
title, 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), which payments 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'.
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 amending the last sentence to read as follows:
`(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 of title 11, United States Code, is amended--
(1) by inserting `555, 556,' after `553,'; and
(2) by inserting `559, 560,' after `557,'.
TITLE VI--STREAMLINING THE BANKRUPTCY SYSTEM
SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.
Section 341(c) of title 11, United States Code, is amended by inserting
after the first sentence 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
one 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. 602. AUDIT PROCEDURES.
(a) AMENDMENTS- Section 586 of title 28, United States Code, is
amended--
(1) in subsection (a) by amending striking paragraph (6) to read as
follows:
`(6) make such reports as the Attorney General directs, including the
results of audits performed under subsection (f); and'; and
(2) by adding at the end the following:
`(f)(1)(A) The Attorney General shall establish procedures to determine
the accuracy, veracity, and completeness of petitions, schedules, and other
information which the debtor is required to provide under sections 521 and
1322 of title 11, and, if applicable, section 111 of title 11, in individual
cases filed under chapter 7 or 13 of such title. Such audits shall be in
accordance with generally accepted auditing standards and performed by
independent certified public accountants or independent licensed public
accountants.
`(B) Those procedures shall--
`(i) establish a method of selecting appropriate qualified persons to
contract to perform those audits;
`(ii) 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;
`(iii) 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; and
`(iv) 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.
`(2) The United States trustee for each district is authorized to contract
with auditors to perform audits in cases designated by the United States
trustee according to the procedures established under paragraph (1).
`(3)(A) The report of each audit conducted under this subsection 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 where a material misstatement of income or expenditures or of assets
has been reported, the clerk of the bankruptcy court shall give notice of the
misstatement to the creditors in the case.
`(B) If a material misstatement of income or expenditures or of assets is
reported, the United States trustee shall--
`(i) report the material misstatement, if appropriate, to the United
States Attorney pursuant to section 3057 of title 18, United States Code;
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, United States Code.'.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11, U.S.C- Section 521(a) of title
11, United States Code, as amended by section 604, is amended in paragraphs
(3) and (4) by adding `or an auditor appointed pursuant to section 586 of
title 28, United States Code' after `serving in the case'.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11, U.S.C- Section 727(d) of title
11, United States Code, is amended--
(1) by deleting `or' at the end of paragraph (2);
(2) by substituting `; or' for the period at the end of paragraph (3);
and
(3) by adding the following at the end the following:
`(4) the debtor has failed to explain satisfactorily--
`(A) a material misstatement in an audit performed pursuant to section
586(f) of title 28, United States Code; 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 conducted pursuant to section 586(f) of title 28, United States
Code.'.
(d) EFFECTIVE DATE- The amendments made by this section shall take effect
18 months after the date of enactment of this Act.
SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7 AND 13 CASES.
(a) NOTICE- Section 342 of title 11, United States Code, is amended--
(A) by striking `, but the failure of such notice to contain such
information shall not invalidate the legal effect of such notice';
and
(B) by adding the following at the end:
`If the credit agreement between the debtor and the creditor or the last
communication before the filing of the petition in a voluntary case from the
creditor to a debtor who is an individual states an account number of the
debtor which is the current account number of the debtor with respect to any
debt held by the creditor against the debtor, the debtor shall include such
account number in any notice to the creditor required to be given under this
title. If the creditor has specified to the debtor an address at which the
creditor wishes to receive correspondence regarding the debtor's account, any
notice to the creditor required to be given by the debtor under this title
shall be given at such address. For the purposes of this section, `notice'
shall include, but shall not be limited to, any correspondence from the debtor
to the creditor after the commencement of the case, any statement of the
debtor's intention under section 521(a)(2) of this title, notice of the
commencement of any proceeding in the case to which the creditor is a party,
and any notice of the hearing under section 1324 of this title.';
(2) by adding at the end the following:
`(d) At any time, a creditor in a case of an individual debtor under
chapter 7 or 13 may file with the court and serve on the debtor a notice of
the address to be used to notify the creditor in that case. Five days after
receipt of such notice, if the court or the debtor is required to give the
creditor notice, such notice shall be given at that address.
`(e) An entity may file with the court a notice stating its address for
notice in cases under chapters 7 and 13. After 30 days following the filing of
such notice, any notice in any case filed under chapter 7 or 13 given by the
court shall be to that address unless specific notice is given under
subsection (d) with respect to a particular case.
`(f) Notice given to a creditor other than as provided in this section
shall not be effective notice until it has been brought to the attention of
the creditor. If the creditor has designated a person or department to be
responsible for receiving notices concerning bankruptcy cases and has
established reasonable procedures so that bankruptcy notices received by the
creditor will be delivered to such department or person, notice will not be
brought to the attention of the creditor until received by such person or
department. No sanction under section 362(h) of this title or any other
sanction which a court may impose on account of violations of the stay under
section 362(a) of this title or failure to comply with section 542 or 543 of
this title may be imposed on any action of the creditor unless the action
takes place after the creditor has received notice of the commencement of the
case effective under this section.'.
(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as
amended by sections 121, 604, 122, 301, and 302, is amended--
(1) by inserting `(a)' before `The debtor shall--';
(2) by striking paragraph (1) and inserting the following:
`(A) a list of creditors; and
`(B) unless the court orders otherwise--
`(i) a schedule of assets and liabilities;
`(ii) a schedule of current income and current
expenditures;
`(iii) a statement of the debtor's financial affairs and, if
applicable, a certificate--
`(I) of an attorney whose name is on the petition as the attorney
for the debtor or any bankruptcy petition preparer signing the
petition pursuant to section 110(b)(1) of this title indicating that
such attorney or bankruptcy petition preparer delivered to the debtor
any notice required by section 342(b) of this title; or
`(II) if no attorney for the debtor is indicated and no bankruptcy
petition preparer signed the petition, of the debtor that such notice
was obtained and read by the debtor;
`(iv) copies of any Federal tax returns, including any schedules or
attachments, filed by the debtor for the 3-year period preceding the
order for relief;
`(v) copies of all payment advices or other evidence of payment, if
any, received by the debtor from any employer of the debtor in the
period 60 days prior to the filing of the petition;
`(vi) a statement of the amount of projected monthly net income,
itemized to show how calculated; and
`(vii) a statement disclosing any reasonably anticipated increase in
income or expenditures over the 12-month period following the date of
filing;'; and
(3) by adding at the end the following:
`(e)(1) At any time, a creditor, in the case of an individual under
chapter 7 or 13, may file with the court notice that the creditor requests the
petition, schedules, and a statement of affairs filed by the debtor in the
case and the court shall make those documents available to the creditor who
requests those documents.
`(2) At any time, a creditor in a case under chapter 13 may file with the
court notice that the creditor requests the plan filed by the debtor in the
case, and the court shall make such plan available to the creditor who
requests such plan at a reasonable cost and not later than 5 days after such
request.
`(f) An individual debtor in a case under chapter 7 or 13 shall file with
the court--
`(1) at the time filed with the taxing authority, all tax returns,
including any schedules or attachments, with respect to the period from the
commencement of the case until such time as the case is closed;
`(2) at the time filed with the taxing authority, all tax returns,
including any schedules or attachments, that were not filed with the taxing
authority when the schedules under subsection (a)(1) were filed with respect
to the period that is 3 years before the order for relief;
`(3) any amendments to any of the tax returns, including schedules or
attachments, described in paragraph (1) or (2); and
`(4) in a case under chapter 13, a statement subject to the penalties of
perjury by the debtor of the debtor's income and expenditures in the
preceding tax year and monthly income, that shows how the amounts are
calculated--
`(A) beginning on the date that is the later of 90 days after the
close of the debtor's tax year or 1 year after the order for relief,
unless a plan has been confirmed; and
`(B) thereafter, on or before the date that is 45 days before each
anniversary of the confirmation of the plan until the case is
closed.
`(d)(1) A statement referred to in subsection (c)(4) shall disclose--
`(A) the amount and sources of income of the debtor;
`(B) the identity of any persons responsible with the debtor for the
support of any dependents of the debtor; and
`(C) the identity of any persons 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 paragraph (1) shall be available to the United States trustee,
any bankruptcy administrator, any trustee, and any party in interest for
inspection and copying, subject to the requirements of subsection (e).
`(g)(1) Not later than 30 days after the date of enactment of the Consumer
Bankruptcy Reform Act of 1999, the Director of the Administrative Office of
the United States Courts shall establish procedures for safeguarding the
confidentiality of any tax information required to be provided under this
section.
`(2) The procedures under paragraph (1) shall include restrictions on
creditor access to tax information that is required to be provided under this
section.
`(3) Not later than 1 year after the date of enactment of the Consumer
Bankruptcy Reform Act of 1999, the Director of the Administrative Office of
the United States Courts shall prepare, and submit to Congress a report
that--
`(A) assesses the effectiveness of the procedures under paragraph (1);
and
`(B) if appropriate, includes proposed legislation--
`(i) to further protect the confidentiality of tax information;
and
`(ii) to provide penalties for the improper use by any person of the
tax information required to be provided under this section.
`(h) If requested by the United States trustee or a trustee serving in the
case, the debtor provide a document that establishes the identity of the
debtor, including a driver's license, passport, or other document that
contains a photograph of the debtor and such other personal identifying
information relating to the debtor that establishes the identity of the
debtor.'.
SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE REQUIRED
INFORMATION.
Section 521 of title 11, United States Code, is amended--
(1) by inserting `(a)' before `The debtor'; and
(2) by adding at the end the following:
`(b)(1) Notwithstanding section 707(a) of this title, and subject to
paragraph (2), if an individual debtor in a voluntary case under chapter 7 or
13 fails to file all of the information required under subsection (a)(1)
within 45 days after the filing of the petition commencing the case, the case
shall be automatically dismissed effective on the 46th day after the filing of
the petition.
`(2) With respect to a case described in paragraph (1), any party in
interest may request the court to enter an order dismissing the case. The
court shall, if so requested, enter an order of dismissal not later than 5
days after such request.
`(3) Upon request of the debtor made within 45 days after the filing of
the petition commencing a case described in paragraph (1), the court may allow
the debtor an additional period of not to exceed 45 days to file the
information required under subsection (a)(1) if the court finds justification
for extending the period for the filing.'.
SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE
PLAN.
(a) HEARING- 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 meeting of creditors under
section 341(a) of this title.'.
(b) FILING OF PLAN- Section 1321 of title 11, United States Code, is
amended to read as follows:
`Sec. 1321. Filing of plan
`The debtor shall file a plan not later than 90 days after the order for
relief under this chapter, except that the court may extend such period if the
need for an extension is attributable to circumstances for which the debtor
should not justly be held accountable.'.
SEC. 606. 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) If the current monthly total income of the debtor and in a joint
case, the debtor and the debtor's spouse combined, is not less than the
highest national median family income reported for a family of equal or lesser
size or, in the case of a household of 1 person, not less than the national
median household income for 1 earner, the plan may not provide for payments
over a period that is longer than 5 years. If the current monthly total income
of the debtor or in a joint case, the debtor and the debtor's spouse combined,
is less than the highest national median family income reported for a family
of equal or lesser size, or in the case of a household of 1 person less than
the national median household income for 1 earner, 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.'; and
(A) by striking in subsection (c) `three years' and inserting `the
applicable commitment period under section 1325(b)(1)(B)(ii)';
and
(B) by inserting at the end of subsection (c) the following:
`The duration period shall be 5 years if the current monthly total income
of the debtor, and in a joint case, the debtor and the debtor's spouse
combined, is not less than the highest national median family income reported
for a family of equal or lesser size or, in the case of a household of 1
person, not less than the national median household income for 1 earner, as of
the date of the modification and shall be 3 years if the current monthly total
income is less than the highest national median family income reported for a
family of equal or lesser size or, in the case of a household of 1 person,
less than the national median household income for 1 earner as of the date of
the modification.'.
SEC. 607. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE
FEDERAL RULES OF BANKRUPTCY PROCEDURE.
It is the sense of the Congress that rule 9011 of the Federal Rules of
Bankruptcy Procedure (11 U.S.C. App) should be modified to include a
requirement that all documents (including schedules), signed and unsigned,
submitted to the court or to a trustee by debtors who represent themselves and
debtors who are represented by an attorney be submitted only after the debtor
or the debtor's attorney has made reasonable inquiry to verify that the
information contained in such documents is well grounded in fact, and is
warranted by existing law or a good-faith argument for the extension,
modification, or reversal of existing law.
SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN CHAPTER 11 BANKRUPTCY
CASES.
(a) AMENDMENTS- Section 1930(a)(6) of title 28, United States Code, is
amended--
(1) in the 1st sentence by striking `until the case is converted or
dismissed, whichever occurs first'; and
(A) by striking `The' and inserting `Until the plan is confirmed or
the case is converted (whichever occurs first) the'; and
(B) by striking `less than $300,000;' and inserting `less than
$300,000. Until the case is converted, dismissed, or closed (whichever
occurs first and without regard to confirmation of the plan) the fee shall
be'.
(b) DELAYED EFFECTIVE DATE- The amendments made by subsection (a) shall
take effect on October 1, 1999.
SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO DEPENDENT
STUDENTS.
Not later than 1 year after the date of the enactment of this Act, the
Comptroller General of the United States shall--
(1) conduct a study regarding the impact that the extension of credit to
individuals who are--
(A) claimed as dependents for purposes of the Internal Revenue Code of
1986; and
(B) enrolled in post-secondary educational institutions,
has on the rate of cases filed under title 11 of the United States Code;
and
(2) submit to the Speaker of the House of Representatives and the
President pro tempore of the Senate a report summarizing such study.
SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(e)'; and
(2) by adding at the end the following:
`(2) Notwithstanding paragraph (1), in the case of an individual filing
under chapter 7, 11, or 13, the stay under subsection (a) shall terminate on
the date that is 60 days after a request is made by a party in interest under
subsection (d), unless--
`(A) a final decision is rendered by the court during the 60-day period
beginning on the date of the request; or
`(B) that 60-day period is extended--
`(i) by agreement of all parties in interest; or
`(ii) by the court for such specific period of time as the court finds
is required by for good cause as described in findings made by the
court.'.
SEC. 611. 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 chapter 11 or 12 but not in a
case converted to chapter 7, with allowed secured claims in cases under
chapters 11 and 12'; and
(B) by striking the period and inserting `; and'; and
(3) by adding at the end the following:
`(C) with respect to cases converted from chapter 13--
`(i) the claim of any creditor holding security as of the date of the
petition shall continue to be secured by that security unless the full
amount of such claim determined under applicable nonbankruptcy law has
been paid in full as of the date of conversion, notwithstanding any
valuation or determination of the amount of an allowed secured claim made
for the purposes of the chapter 13 proceeding; and
`(ii) unless a prebankruptcy default has been fully cured pursuant to
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.'.
TITLE VII--BANKRUPTCY DATA
SEC. 701. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT- Chapter 6 of part I of title 28, United States Code, is
amended by adding at the end the following:
`Sec. 159. Bankruptcy statistics
`(a) The clerk of each district shall compile statistics regarding
individual debtors with primarily consumer debts seeking relief under chapters
7, 11, and 13 of title 11. Those statistics shall be in a form prescribed by
the Director of the Administrative Office of the United States Courts
(referred to in this section as the `Office').
`(b) The Director shall--
`(1) compile the statistics referred to in subsection (a);
`(2) make the statistics available to the public; and
`(3) not later than October 31, 1999, 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 total monthly income, projected monthly net income,
and average income and average expenses of those debtors as reported on
the schedules and statements that each such debtor files under sections
111, 521, and 1322 of title 11;
`(C) the aggregate amount of debt discharged in the reporting period,
determined as the difference between the total amount of debt and
obligations of a debtor reported on the schedules and the amount of such
debt reported in categories which are predominantly
nondischargeable;
`(D) the average period of time between the filing of the petition and
the closing of the case;
`(E) for the reporting period--
`(i) the number of cases in which a reaffirmation was filed;
and
`(ii)(I) the total number of reaffirmations filed;
`(II) of those cases in which a reaffirmation was filed, the number
in which the debtor was not represented by an attorney; and
`(III) of those cases, the number of cases in which the
reaffirmation was approved by the court;
`(F) with respect to cases filed under chapter 13 of title 11, for the
reporting period--
`(i)(I) the number of cases in which a final order was entered
determining the value of property securing a claim in an amount less
than the amount of the claim; and
`(II) the number of final orders determining the value of property
securing a claim issued;
`(ii) the number of cases dismissed for failure to make payments
under the plan; and
`(iii) the number of cases in which the debtor filed another case
within the 6 years previous to the filing;
`(G) the number of cases in which creditors were fined for misconduct
and any amount of punitive damages awarded by the court for creditor
misconduct; and
`(H) the number of cases in which sanctions under rule 9011 of the
Federal Rules of Bankruptcy Procedure were imposed against debtor's
counsel and damages awarded under such Rule.'.
(b) CLERICAL AMENDMENT- The table of sections at the beginning of 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. 702. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) AMENDMENT- Title 28 of the United States Code is amended by inserting
after section 589a the following:
`Sec. 589b. Bankruptcy data
`(a) RULES- The Attorney General shall, within a reasonable time after the
effective date of this section, issue rules requiring uniform forms for (and
from time to time thereafter to appropriately modify and approve)--
`(1) final reports by trustees in cases under chapters 7, 12, and 13 of
title 11; and
`(2) periodic reports by debtors in possession or trustees, as the case
may be, in cases under chapter 11 of title 11.
`(b) REPORTS- All reports 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 1 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; and
`(2) economy, simplicity, and lack of undue burden on persons with a
duty to file reports.
`(d) FINAL REPORTS- Final reports proposed for adoption by trustees under
chapters 7, 12, and 13 of title 11 shall, in addition to such other matters as
are required by law or as the Attorney General in the discretion of the
Attorney General, shall propose, include with respect to a case under such
title--
`(1) information about the length of time the case was pending;
`(4) receipts and disbursements of the estate;
`(5) expenses of administration;
`(8) distributions to claimants and claims discharged without
payment,
in each case by appropriate category and, in cases under chapters 12 and
13 of title 11, date of confirmation of the plan, each modification thereto,
and defaults by the debtor in performance under the plan.
`(e) PERIODIC REPORTS- Periodic reports proposed for adoption by trustees
or debtors in possession under chapter 11 of title 11 shall, in addition to
such other matters as are required by law or as the Attorney General, in the
discretion of the Attorney General, shall propose, include--
`(1) information about the standard industry classification, published
by the Department of Commerce, for the businesses conducted by the
debtor;
`(2) length of time the case has been pending;
`(3) number of full-time employees as at the date of the order for
relief and at 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, in 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) TECHNICAL AMENDMENT- The table of sections of chapter 39 of title 28,
United States Code, is amended by adding at the end the following:
`589b. Bankruptcy data.'.
SEC. 703. SENSE OF THE CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY
DATA.
It is the sense of the 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 of the
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
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 VIII--BANKRUPTCY TAX PROVISIONS
SEC. 801. 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), after `507(a)(1)', insert `(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)'; 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) of this title, 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 set forth in
this section and subject to the requirements of subsection (e)--
`(1) claims for wages, salaries, and commissions that are entitled to
priority under section 507(a)(3) of this title; or
`(2) claims for contributions to an employee benefit plan entitled to
priority under section 507(a)(4) of this title,
may be paid from property of the estate which secures a tax lien, or the
proceeds of such property.'.
(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. 802. EFFECTIVE NOTICE TO GOVERNMENT.
(a) EFFECTIVE NOTICE TO GOVERNMENTAL UNITS- Section 342 of title 11,
United States Code, is amended by adding at the end the following:
`(d) If a debtor lists a governmental unit as a creditor in a list or
schedule, any notice required to be given by the debtor under this title, any
rule, any applicable law, or any order of the court, shall identify the
department, agency, or instrumentality through which the debtor is indebted.
The debtor shall identify (with information such as a taxpayer identification
number, loan, account or contract number, or real estate parcel number, where
applicable), and describe the underlying basis for the governmental unit's
claim. If the debtor's liability to a governmental unit arises from a debt or
obligation owed or incurred by another individual, entity, or organization, or
under a different name, the debtor shall identify such individual, entity,
organization, or name.
`(e) The clerk shall keep and update quarterly, in the form and manner as
the Director of the Administrative Office of the United States Courts
prescribes, and make available to debtors, a register in which a governmental
unit may designate a safe harbor mailing address for service of notice in
cases pending in the district. A governmental unit may file a statement with
the clerk designating a safe harbor address to which notices are to be sent,
unless such governmental unit files a notice of change of address.'.
(b) ADOPTION OF RULES PROVIDING NOTICE- The Advisory Committee on
Bankruptcy Rules of the Judicial Conference shall, within a reasonable period
of time after the date of the enactment of this Act, propose for adoption
enhanced rules for providing notice to State, Federal, and local government
units that have regulatory authority over the debtor or which may be creditors
in the debtor's case. Such rules shall be reasonably calculated to ensure that
notice will reach the representatives of the governmental unit, or subdivision
thereof, who will be the proper persons authorized to act upon the notice. At
a minimum, the rules should require that the debtor--
(1) identify in the schedules and the notice, the subdivision, agency,
or entity in respect of which such notice should be received;
(2) provide sufficient information (such as case captions, permit
numbers, taxpayer identification numbers, or similar identifying
information) to permit the governmental unit or subdivision thereof,
entitled to receive such notice, to identify the debtor or the person or
entity on behalf of which the debtor is providing notice where the debtor
may be a successor in interest or may not be the same as the person or
entity which incurred the debt or obligation; and
(3) identify, in appropriate schedules, served together with the notice,
the property in respect of which the claim or regulatory obligation may have
arisen, if any, the nature of such claim or regulatory obligation and the
purpose for which notice is being given.
(c) EFFECT OF FAILURE OF NOTICE- Section 342 of title 11, United States
Code, as amended by subsection (a), is amended by adding at the end the
following:
`(f) A notice that does not comply with subsections (d) and (e) shall not
be effective unless the debtor demonstrates, by clear and convincing evidence,
that timely notice was given in a manner reasonably calculated to satisfy the
requirements of this section was given, and that--
`(1) either the notice was timely sent to the safe harbor address
provided in the register maintained by the clerk of the district in which
the case was pending for such purposes; or
`(2) no safe harbor address was provided in such list for the
governmental unit and that an officer of the governmental unit who is
responsible for the matter or claim had actual knowledge of the case in
sufficient time to act.'.
SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
Section 505(b) of title 11, United States Code, is amended by striking
`Unless' at the beginning of the second sentence thereof and inserting `If the
request is made substantially in the manner designated by the governmental
unit and unless'.
SEC. 804. RATE OF INTEREST ON TAX CLAIMS.
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
`If any provision of this title requires the payment of interest on a tax
claim or requires 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 as follows:
`(1) In the case of ad valorem tax claims, whether secured or unsecured,
other unsecured tax claims where interest is required to be paid under
section 726(a)(5) of this title, secured tax claims, and administrative tax
claims paid under section 503(b)(1) of this title, the rate shall be
determined under applicable nonbankruptcy law.
`(2) In the case of all other tax claims, the minimum rate of interest
shall be the Federal short-term rate rounded to the nearest full percent,
determined under section 1274(d) of the Internal Revenue Code of 1986, plus
3 percentage points.
`(A) In the case of claims for Federal income taxes, such rate shall
be subject to any adjustment that may be required under section 6621(d) of
the Internal Revenue Code of 1986.
`(B) In the case of taxes paid under a confirmed plan or
reorganization, such rate shall be determined as of the calendar month in
which the plan is confirmed.'.
SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.
Section 507(a)(9)(A) of title 11, United States Code, as so redesignated,
is amended--
(1) in clause (i) by inserting after `petition' and before the semicolon
`, plus any time, plus 6 months, during which the stay of proceedings was in
effect in a prior case under this title'; and
(2) amend clause (ii) to read as follows:
`(ii) assessed within 240 days before the date of the filing of the
petition, exclusive of--
`(I) any time plus 30 days during which an offer in compromise
with respect of such tax, was pending or in effect during such 240-day
period;
`(II) any time plus 30 days during which an installment agreement
with respect of such tax was pending or in effect during such 240-day
period, up to 1 year; and
`(III) any time plus 6 months during which a stay of proceedings
against collections was in effect in a prior case under this title
during such 240-day period.'.
SEC. 806. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code, is amended by
striking `assessed' and inserting `incurred'.
SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code, is amended by
inserting `(1),' after `paragraph'.
SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, as amended by section
119A, is amended by adding at the end the following:
`(6) Notwithstanding the provisions of paragraph (1), the confirmation of
a plan does not discharge a debtor which is a corporation from any debt for a
tax or customs duty with respect to which the debtor made a fraudulent return
or willfully attempted in any manner to evade or defeat such tax.'.
SEC. 809. STAY OF TAX PROCEEDINGS.
(a) SECTION 362 STAY LIMITED TO PREPETITION TAXES- Section 362(a)(8) of
title 11, United States Code, is amended by striking the period at the end and
inserting `, in respect of a tax liability for a taxable period ending before
the order for relief.'.
(b) APPEAL OF TAX COURT DECISIONS PERMITTED- Section 362(b)(9) of title
11, United States Code, is amended--
(1) in subparagraph (C) by striking `or' at the end;
(2) in subparagraph (D) by striking the period at the end and inserting
`; or'; and
(3) by adding at the end the following:
`(E) the appeal of a decision by a court or administrative tribunal
which determines a tax liability of the debtor without regard to whether
such determination was made prepetition or postpetition.'.
SEC. 810. 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; and
(2) in subparagraph (C)--
(A) by striking `deferred cash payments, over a period not exceeding
six years after the date of assessment of such claim,' and inserting
`regular installment payments in cash, but in no case with a balloon
provision, and no more than three months apart, beginning no later than
the effective date of the plan and ending on the earlier of five years
after the petition date or the last date payments are to be made under the
plan to unsecured creditors,';
(B) by striking the period at the end and inserting `; and';
and
(3) by adding at the end the following:
`(D) with respect to a secured claim which would be described in
section 507(a)(8) of this title but for its secured status, the holder of
such claim will receive on account of such claim cash payments of not less
than is required in subparagraph (C) and over a period no greater than is
required in such subparagraph.'.
SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended by striking the
semicolon at the end and inserting `, except where such purchaser is a
purchaser described in section 6323 of the Internal Revenue Code of 1986 or
similar provision of State or local law;'.
SEC. 812. 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) Such taxes shall be paid when due in the conduct of such business
unless--
`(1) the tax is a property tax secured by a lien against property that
is abandoned within a reasonable time after the lien attaches, by the
trustee of a bankruptcy estate, pursuant to 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, the court has made 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 such
tax.'.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED- Section 503(b)(1)(B) of title
11, United States Code, is amended in clause (i) by inserting after `estate,'
and before `except' the following: `whether secured or unsecured, including
property taxes for which liability is in rem only, in personam or both,'.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE TAXES ELIMINATED-
Section 503(b)(1) of title 11, United States Code, is amended by adding at the
end the following:
`(D) notwithstanding the requirements of subsection (a) of this section,
a governmental unit shall not be required to file a request for the payment
of a claim described in subparagraph (B) or (C);'.
(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 in respect of the property' before the period at the
end.
SEC. 813. 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 `on or before the earlier of 10 days after the mailing
to creditors of the summary of the trustee's final report or the date on which
the trustee commences final distribution under this section'.
SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a)(1)(B) of title 11, United States Code, is amended--
(1) by inserting `or equivalent report or notice,' after `a
return,';
(A) by inserting `or given' after `filed'; and
(B) by striking `or' at the end;
(A) by inserting `or given' after `filed'; and
(B) by inserting `, report, or notice' after `return'; and
(4) by adding at the end the following:
`(iii) for purposes of this subsection, a return--
`(I) must satisfy the requirements of applicable nonbankruptcy
law, and 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 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 similar State or local law;
and
`(II) must have been filed in a manner permitted by applicable
nonbankruptcy law; or'.
SEC. 815. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.
Section 505(b) of title 11, United States Code, is amended in the second
sentence by inserting `the estate,' after `misrepresentation,'.
SEC. 816. 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 section 143, is
amended--
(1) in paragraph (6) by striking `and' at the end;
(2) in paragraph (7) by striking the period at the end and inserting `;
and'; and
(3) by adding at the end the following:
`(8) if the debtor has filed all Federal, State, and local tax returns
as required by section 1308 of this title.'.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS- (1) Chapter 13 of
title 11, United States
Code, as amended by section 137, is amended by adding at the end the
following:
`Sec. 1308. Filing of prepetition tax returns
`(a) On or before the day prior to the day on which the first meeting of
the creditors is convened under section 341(a) of this title, the debtor shall
have filed with appropriate tax authorities all tax returns for all taxable
periods ending in the 3-year period ending on the date of filing of the
petition.
`(b) If the tax returns required by subsection (a) have not been filed by
the date on which the first meeting of creditors is convened under section
341(a) of this title, the trustee may continue such meeting for a reasonable
period of time, to allow the debtor additional time to file any unfiled
returns, but such additional time shall be no more than--
`(1) for returns that are past due as of the date of the filing of the
petition, 120 days from such date;
`(2) for returns which are not past due as of the date of the filing of
the petition, the later of 120 days from such date or the due date for such
returns under the last automatic extension of time for filing such returns
to which the debtor is entitled, and for which request has been timely made,
according to applicable nonbankruptcy law; and
`(3) upon notice and hearing, and order entered before the lapse of any
deadline fixed according to this subsection, where the debtor demonstrates,
by clear and convincing evidence, that the failure to file the returns as
required is because of circumstances beyond the control of the debtor, the
court may extend the deadlines set by the trustee as provided in this
subsection for--
`(A) a period of no more than 30 days for returns described in
paragraph (1) of this subsection; and
`(B) for no more than the period of time ending on the applicable
extended due date for the returns described in paragraph (2).
`(c) For purposes of this section only, a return includes a return
prepared pursuant to section 6020 (a) or (b) of the Internal Revenue Code of
1986 or similar State or local law, or a written stipulation to a judgment
entered by a nonbankruptcy tribunal.'.
(2) The table of sections of chapter 13 of title 11, United States Code,
is amended by inserting after the item relating to section 1307 the
following:
`1308. Filing of prepetition tax returns.'.
(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY- Section 1307 of title
11, United States Code, is amended--
(1) by redesignating subsections (e) and (f) as subsections (f) and (g),
respectively; and
(2) by inserting after subsection (d) the following:
`(e) Upon the failure of the debtor to file tax returns under section 1308
of this title, 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 interests of creditors and the estate.'.
(d) TIMELY FILED CLAIMS- Section 502(b)(9) of title 11, United States
Code, is amended by striking the period at the end and inserting `, and except
that in a case under chapter 13 of this title, a claim of a governmental unit
for a tax in respect of a return filed under section 1308 of this title shall
be timely if it is filed on or before 60 days after such return or returns
were filed as required.'.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION- It is the sense of
the Congress that the Advisory Committee on Bankruptcy Rules of the Judicial
Conference should, within a reasonable period of time after the date of the
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, a governmental unit may object
to the confirmation of a plan on or before 60 days after the debtor files
all tax returns required under sections 1308 and 1325(a)(7) of title 11,
United States Code; and
(2) in addition to the provisions of Rule 3007, in a case under chapter
13 of title 11, United States Code, no objection to a tax in respect of a
return required to be filed under such section 1308 shall be filed until
such return has been filed as required.
SEC. 817. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a) of title 11, United States Code, is amended in paragraph
(1)--
(1) by inserting after `records,' the following: `including a full
discussion of the potential material Federal, State, and local tax
consequences of the plan to the debtor, any successor to the debtor, and a
hypothetical investor domiciled in the State in which the debtor resides or
has its principal place of
business typical of the holders of claims or interests in the case,';
(2) by inserting `such' after `enable'; and
(3) by striking `reasonable' where it appears after `hypothetical' and
by striking `typical of holders of claims or interests' after
`investor'.
SEC. 818. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended by sections
120, 134, 139, and 203, is amended--
(1) in paragraph (29) by striking `or';
(2) in paragraph (29) by striking the period at the end and inserting `;
or'; and
(3) by inserting after paragraph (29) the following:
`(30) under subsection (a) of the setoff of an income tax refund, by a
governmental unit, in respect of 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, unless--
`(A) prior to such setoff, an action to determine the amount or
legality of such tax liability under section 505(a) was commenced;
or
`(B) where the setoff of an income tax refund is not permitted 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.'.
TITLE IX--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 901. 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
`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.
`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 of a foreign proceeding.
`1516. Presumptions concerning recognition.
`1517. Order recognizing a foreign proceeding.
`1518. Subsequent information.
`1519. Relief that may be granted upon petition for recognition of a
foreign proceeding.
`1520. Effects of recognition of a foreign main proceeding.
`1521. Relief that may be granted upon recognition of a foreign
proceeding.
`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 of chapter is to incorporate the Model Law on
Cross-Border Insolvency so as to provide effective mechanisms for dealing with
cases of cross-border insolvency with the objectives of--
`(1) cooperation between--
`(A) United States courts, United States Trustees, trustees,
examiners, debtors, and debtors in possession; and
`(B) the courts and other competent authorities of foreign countries
involved in cross-border insolvency cases;
`(2) greater legal certainty for trade and investment;
`(3) fair and efficient administration of cross-border insolvencies that
protects the interests of all creditors, and other interested entities,
including the debtor;
`(4) protection and maximization of the value of the debtor's assets;
and
`(5) facilitation of the rescue of financially troubled businesses,
thereby protecting investment and preserving employment.
`(b) This chapter applies where--
`(1) assistance is sought in the United States by a foreign court or a
foreign representative in connection with a foreign proceeding;
`(2) assistance is sought in a foreign country in connection with a case
under this title;
`(3) a foreign proceeding and a case under this title with respect to
the same debtor are taking place concurrently; or
`(4) creditors or other interested persons in a foreign country have an
interest in requesting the commencement of, or participating in, a case or
proceeding under this title.
`(c) This chapter does not apply to--
`(1) a proceeding concerning an entity identified by exclusion in
subsection 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, 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.
`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;
and
`(7) `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 1 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, upon recognition of a foreign proceeding, to 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 is entitled to commence a case under section
1504 by filing a petition for recognition under section 1515, and upon
recognition, to apply directly to other Federal and State courts for
appropriate relief in those courts.
`(b) Upon recognition, and subject to section 1510, a foreign
representative has the capacity to sue and be sued, and shall be subject to
the laws of the United States of general applicability.
`(c) Subject to section 1510 of this title, a foreign representative is
subject to laws of general application.
`(d) Recognition under this chapter is prerequisite to the granting of
comity or cooperation to a foreign representative in any State or Federal
court in the United States. Any request for comity or cooperation by a foreign
representative in any court shall be accompanied by a sworn statement setting
forth whether recognition under section 1515 has been sought and the status of
any such petition.
`(e) Upon denial of recognition under this chapter, the court may issue
appropriate orders necessary to prevent an attempt to obtain comity or
cooperation from courts in the United States without such recognition.
`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 statement describing the petition for recognition and its
current status. 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
that 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 letters rogatory or other similar 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 pursuant to 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 of a foreign proceeding
`(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)
must be translated into English. The court may require a translation into
English of additional documents.
`Sec. 1516. Presumptions concerning recognition
`(a) If the decision or certificate referred to in section 1515(b)
indicates that the foreign proceeding is a foreign proceeding as defined in
section 101 and that the person or body is a foreign representative as defined
in section 101, the court is entitled to so presume.
`(b) The court is entitled to presume that documents submitted in support
of the petition for recognition are authentic, whether or not they have been
legalized.
`(c) In the absence of evidence to the contrary, the debtor's registered
office, or habitual residence in the case of an individual, is presumed to be
the center of the debtor's main interests.
`Sec. 1517. Order recognizing a foreign proceeding
`(a) Subject to section 1506, after notice and a hearing an order
recognizing a foreign proceeding shall be entered if--
`(1) the foreign proceeding is a foreign main proceeding or foreign
nonmain proceeding within the meaning of section 1502;
`(2) the foreign representative applying for recognition is a person or
body as defined in section 101; and
`(3) the petition meets the requirements of section 1515.
`(b) The foreign proceeding shall be recognized--
`(1) as a foreign main proceeding if it is taking place in the country
where the debtor has the center of its main interests; or
`(2) as a foreign nonmain proceeding if the debtor has an establishment
within the meaning of section 1502 in the foreign country where the
proceeding is pending.
`(c) A petition for recognition of a foreign proceeding shall be decided
upon at the earliest possible time. Entry of an order recognizing a foreign
proceeding shall constitute 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 granting of recognition. The case under this chapter
may be closed in the manner prescribed for a case 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 petition for recognition of a
foreign proceeding
`(a) From the time of filing a petition for recognition until the petition
is decided upon, 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 decided upon.
`(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.
`Sec. 1520. Effects of recognition of a foreign main proceeding
`(a) Upon recognition of a foreign proceeding that is a foreign main
proceeding--
`(1) section 362 applies with respect to the debtor and that property of
the debtor that is within the territorial jurisdiction of the United
States;
`(2) a transfer, an encumbrance, or any other disposition of an interest
of the debtor in property within the territorial jurisdiction of the United
States is restrained as and to the extent that is provided for property of
an estate under sections 363, 549, and 552; and
`(3) unless the court orders otherwise, the foreign representative may
operate the debtor's business and may exercise the powers of a trustee under
section 549, subject to sections 363 and 552.
`(b) The scope, and the modification or termination, of the stay and
restraints referred to in subsection (a) are subject to the exceptions and
limitations provided in subsections (b), (c), and (d) of section 362,
subsections (b) and (c) of section 363, and sections 552, 555 through 557,
559, and 560.
`(c) Subsection (a) does not affect the right to commence individual
actions or proceedings in a foreign country to the extent necessary to
preserve a claim against the debtor.
`(d) 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 of a foreign
proceeding
`(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 individual actions or
individual proceedings 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).
`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)(2) 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,
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
`Where 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) When the case in the United States is taking place at the time the
petition for recognition of the foreign proceeding is filed--
`(A) any relief granted under sections 1519 or 1521 must be consistent
with the relief granted in the case in the United States; and
`(B) even if the foreign proceeding is recognized as a foreign main
proceeding, section 1520 does not apply.
`(2) When a case in the United States under this title commences after
recognition, or after the filing of the petition for recognition, of the
foreign proceeding--
`(A) any relief in effect under sections 1519 or 1521 shall be
reviewed by the court and shall be modified or terminated if inconsistent
with the case in the United States; and
`(B) if the foreign proceeding is a foreign main proceeding, the stay
and suspension referred to in section 1520(a) shall be modified or
terminated if inconsistent with the relief granted in the case in the
United States.
`(3) In granting, extending, or modifying relief granted to a
representative of a foreign nonmain proceeding, the court must be satisfied
that the relief relates to assets that, under the law 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:
1501'.
SEC. 902. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, 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, 304, 555 through 557, 559, and 560 apply in
a case under chapter 15'; and
(2) by adding at the end the following:
`(j) Chapter 15 applies only in a case under such chapter, except
that--
`(1) sections 1513 and 1514 apply in all cases under this title;
and
`(2) section 1505 applies to trustees and to any other entity (including
an examiner) authorized by the court under chapters 7, 11, and 12, to
debtors in possession under chapters 11 and 12, and to debtors under chapter
9 who are authorized to act under section 1505.'.
(b) DEFINITIONS- Paragraphs (23) and (24) of title 11, United States Code,
are amended to read as follows:
`(23) `foreign proceeding' means a collective judicial or administrative
proceeding in a foreign country, including an interim proceeding, pursuant
to a law relating to insolvency 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)(1) 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 inserting `15,' after `chapter'.
TITLE X--FINANCIAL CONTRACT PROVISIONS
SEC. 1001. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS OF
INSURED DEPOSITORY INSTITUTIONS.
(a) DEFINITION OF QUALIFIED FINANCIAL CONTRACT- Section 11(e)(8)(D)(i) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by
inserting `, resolution or order' after `any similar agreement that the
Corporation determines by regulation'.
(b) DEFINITION OF SECURITIES CONTRACT- Section 11(e)(8)(D)(ii) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read
as follows:
`(ii) SECURITIES CONTRACT- The term `securities
contract'--
`(I) means a contract for the purchase, sale, or loan of a
security, a certificate of deposit, a mortgage loan, or any interest
in a mortgage loan, a group or index of securities, certificates of
deposit, or mortgage loans or interests therein (including any
interest therein or based on the value thereof) or any option on any
of the foregoing, including any option to purchase or sell any such
security, certificate of deposit, loan, interest, group or index, or
option;
`(II) does not include any purchase, sale, or repurchase
obligation under a participation in a commercial mortgage loan unless
the Corporation determines by regulation, resolution, or order to
include any such agreement within the meaning of such
term;
`(III) means any option entered into on a national securities
exchange relating to foreign currencies;
`(IV) means the guarantee by or to any securities clearing agency
of any settlement of cash, securities, certificates of deposit,
mortgage loans or interests therein, group or index of securities,
certificates of deposit, or mortgage loans or interests therein
(including any interest therein or based on the value thereof) or
option on any of the foregoing, including any option to purchase or
sell any such security, certificate of deposit, loan, interest, group
or index or option;
`(V) means any margin loan;
`(VI) means any other agreement or transaction that is similar to
any agreement or transaction referred to in this
clause;
`(VII) means any combination of the agreements or transactions
referred to in this clause;
`(VIII) means any option to enter into any agreement or
transaction referred to in this clause;
`(IX) means a master agreement that provides for an agreement or
transaction referred to in subclause (I), (III), (IV), (V), (VI),
(VII), or (VIII), together with all supplements to any such master
agreement, without regard to whether the master agreement provides for
an agreement or transaction that is not a securities contract under
this clause, except that the master agreement shall be considered to
be a securities contract under this clause only with respect to each
agreement or transaction under the master agreement that is referred
to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII);
and
`(X) means any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred to in
this clause.'.
(c) DEFINITION OF COMMODITY CONTRACT- Section 11(e)(8)(D)(iii) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is amended to
read as follows:
`(iii) COMMODITY CONTRACT- The term `commodity contract'
means--
`(I) with respect to a futures commission merchant, a contract for
the purchase or sale of a commodity for future delivery on, or subject
to the rules of, a contract market or board of trade;
`(II) with respect to a foreign futures commission merchant, a
foreign future;
`(III) with respect to a leverage transaction merchant, a leverage
transaction;
`(IV) with respect to a clearing organization, a contract for the
purchase or sale of a commodity for future delivery on, or subject to
the rules of, a contract market or board of trade that is cleared by
such clearing organization, or commodity option traded on, or subject
to the rules of, a contract market or board of trade that is cleared
by such clearing organization;
`(V) with respect to a commodity options dealer, a commodity
option;
`(VI) any other agreement or transaction that is similar to any
agreement or transaction referred to in this clause;
`(VII) any combination of the agreements or transactions referred
to in this clause;
`(VIII) any option to enter into any agreement or transaction
referred to in this clause;
`(IX) a master agreement that provides for an agreement or
transaction referred to in subclause (I), (II), (III), (IV), (V),
(VI), (VII), or (VIII), together with all supplements to any such
master agreement, without regard to whether the master agreement
provides for an agreement or transaction that is not a commodity
contract under this clause, except that the master agreement shall be
considered to be a commodity contract under this clause only with
respect to each agreement or transaction under the master agreement
that is referred to in subclause (I), (II), (III), (IV), (V), (VI),
(VII), or (VIII); or
`(X) a security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred to in
this clause.'.
(d) DEFINITION OF FORWARD CONTRACT- Section 11(e)(8)(D)(iv) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as
follows:
`(iv) FORWARD CONTRACT- The term `forward contract'
means--
`(I) a contract (other than a commodity contract) for the
purchase, sale, or transfer of a commodity or any similar good,
article, service, right, or interest which is presently or in the
future becomes the subject of dealing in the forward contract
trade,
or product or byproduct thereof, with a maturity date more than 2 days after
the date the contract is entered into, including a repurchase agreement, reverse
repurchase agreement, 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) a security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred to in
subclause (I), (II), (III), or (IV).'.
(e) DEFINITION OF REPURCHASE AGREEMENT- Section 11(e)(8)(D)(v) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read
as follows:
`(v) REPURCHASE AGREEMENT- The terms `repurchase agreement' and
`reverse repurchase agreement'--
`(I) mean an agreement, including related terms, which provides
for the transfer of 1 or more certificates of deposit,
mortgage-related securities (as such term is defined in the Securities
Exchange Act of 1934), mortgage loans, interests in mortgage-related
securities or mortgage loans, eligible bankers' acceptances, qualified
foreign government securities or securities that are direct
obligations of, or that are fully guaranteed by, the United States or
any agency of the United States against the transfer of funds by the
transferee of such certificates of deposit, eligible bankers'
acceptances, securities, loans, or interests with a simultaneous
agreement by such transferee to transfer to the transferor thereof
certificates of deposit, eligible bankers' acceptances, securities,
loans, or interests as described above, at a date certain not later
than 1 year after such transfers or on demand, against the transfer of
funds, or any other similar agreement;
`(II) does not include any repurchase obligation under a
participation in a commercial mortgage loan unless the Corporation
determines by regulation, resolution, or order to include any such
participation within the meaning of such term;
`(III) means any combination of agreements or transactions
referred to in subclauses (I) and (IV);
`(IV) means any option to enter into any agreement or transaction
referred to in subclause (I) or (III);
`(V) means a master agreement that provides for an agreement or
transaction referred to in subclause (I), (III), or (IV), together
with all supplements to any such master agreement, without regard to
whether the master agreement provides for an agreement or transaction
that is not a repurchase agreement under this clause, except that the
master agreement shall be considered to be a repurchase agreement
under this subclause only with respect to each agreement or
transaction under the master agreement that is referred to in
subclause (I), (III), or (IV); and
`(VI) means a security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred to in
subclause (I), (III), (IV), or (V).
For purposes of this clause, the term `qualified foreign government
security' means a security that is a direct obligation of, or that is
fully guaranteed by, the central government of a member of the
Organization for Economic Cooperation and Development (as determined by
regulation or order adopted by the appropriate Federal banking
authority).'.
(f) DEFINITION OF SWAP AGREEMENT- The Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows:
`(vi) SWAP AGREEMENT- The term `swap agreement' means--
`(I) any agreement, including the terms and conditions
incorporated by reference in any such agreement, which is an interest
rate swap, option, future, or forward agreement, including a rate
floor, rate cap, rate collar, cross-currency rate swap, and basis
swap; a spot, same day-tomorrow, tomorrow-next, forward, or other
foreign exchange or precious metals agreement; a currency swap,
option, future, or forward agreement; an equity index or equity swap,
option, future, or forward agreement; a debt index or debt swap,
option, future, or forward agreement; a credit spread or credit swap,
option, future, or forward agreement; a commodity index or commodity
swap, option, future, or forward agreement;
`(II) any agreement or transaction similar to any other agreement
or transaction referred to in this clause that is presently, or in the
future becomes, regularly entered into in the swap market (including
terms and conditions incorporated by reference in such agreement) and
that is a forward, swap, future, or option on 1 or more rates,
currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments, or economic
indices or measures of economic risk or value;
`(III) any combination of agreements or transactions referred to
in this clause;
`(IV) any option to enter into any agreement or transaction
referred to in this clause;
`(V) a master agreement that provides for an agreement or
transaction referred to in subclause (I), (II), (III), or (IV),
together with all supplements to any such master agreement, without
regard to whether the master agreement contains an agreement or
transaction that is not a swap agreement under this clause, except
that the master agreement shall be considered to be a swap agreement
under this clause only with respect to each agreement or transaction
under the master agreement that is referred to in subclause (I), (II),
(III), or (IV); and
`(VI) any security agreement or arrangement or other credit
enhancement related to any agreements or transactions referred to in
subparagraph (I), (II), (III), or (IV).
Such term is applicable for purposes of this Act only and shall not
be construed or applied so as to challenge or affect the
characterization, definition, or treatment of any swap agreement under
any other statute, regulation, or rule, including the Securities Act of
1933, the Securities Exchange Act of 1934, the Public Utility Holding
Company Act of 1935, the Trust Indenture Act of 1939, the Investment
Company Act of 1940, the Investment Advisers Act of 1940, the Securities
Investor Protection Act of 1970, the Commodity Exchange Act, and the
regulations promulgated by the Securities and Exchange Commission or the
Commodity Futures Trading Commission.'.
(g) DEFINITION OF TRANSFER- Section 11(e)(8)(D)(viii) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is amended to read as
follows:
`(viii) TRANSFER- The term `transfer' means every mode, direct or
indirect, absolute or conditional, voluntary or involuntary, of
disposing of or parting with property or with an interest in property,
including retention of title as a security interest and foreclosure of
the depository institutions's equity of redemption.'.
(h) TREATMENT OF QUALIFIED FINANCIAL CONTRACTS- Section 11(e)(8) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(1) in subparagraph (A), by striking `paragraph (10)' and inserting
`paragraphs (9) and (10)';
(2) in subparagraph (A)(i), by striking `to cause the termination or
liquidation' and inserting `such person has to cause the termination,
liquidation, or acceleration';
(3) by amending subparagraph (A)(ii) to read as follows:
`(ii) any right under any security agreement or arrangement or other
credit enhancement related to 1 or more qualified financial contracts
described in clause (i);'; and
(4) by amending subparagraph (E)(ii) to read as follows:
`(ii) any right under any security agreement or arrangement or other
credit enhancement related to 1 or more qualified financial contracts
described in clause (i);'.
(i) AVOIDANCE OF TRANSFERS- 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 (12 U.S.C. 91) or any other Federal or State law
relating to the avoidance of preferential or fraudulent transfers,' before
`the Corporation'.
SEC. 1002. 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' after `the appointment'.
SEC. 1003. 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 1 financial institution, other than a financial
institution for which a conservator, receiver, trustee in bankruptcy, or
other legal custodian has been appointed or which is otherwise the
subject of a bankruptcy or insolvency proceeding--
`(I) all qualified financial contracts between any person or any
affiliate of such person and the 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 pursuant to subparagraph (A)(i), the conservator or receiver for
such 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 1 or more qualified financial contracts the contractual rights of the
parties to such qualified financial contracts, netting contracts, security
agreements or arrangements, or other credit enhancements are enforceable
substantially to the same extent as permitted under this section.
`(C) TRANSFER OF CONTRACTS SUBJECT TO THE RULES OF A CLEARING
ORGANIZATION- In the event that a conservator or receiver transfers any
qualified financial contract and related claims, property and credit
enhancements pursuant to subparagraph (A)(i) and such contract is subject
to the rules of a clearing organization, the clearing organization shall
not be required to accept the transferee as a member by virtue of the
transfer.
`(D) DEFINITION- For purposes of this section, the term `financial
institution' means a broker or dealer, a depository institution, a futures
commission merchant, or any other institution as determined by the
Corporation by regulation to be a financial institution.'.
(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT COUNTERPARTIES- Section
11(e)(10)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A))
is amended by amending the flush material following clause (ii) to read as
follows: `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
further 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 such person has to terminate, liquidate, or net such contract
under paragraph (8)(A) 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 such person has to terminate, liquidate, or net such
contract under paragraph (8)(E) or sections 403 or 404 of the Federal
Deposit Insurance Corporation Improvement Act of 1991, solely by reason
of or incidental to the appointment of a conservator for the depository
institution (or the insolvency or financial condition of the depository
institution for which the conservator has been appointed).
`(iii) NOTICE- For purposes of this subsection, 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) of this subsection.
`(C) TREATMENT OF BRIDGE BANKS- The following institutions shall not
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
for purposes of subsection (e)(9)--
`(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
such institution and the Corporation as receiver for a depository
institution in default.'.
SEC. 1004. 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
further amended--
(1) by redesignating paragraphs (11) through (15) as paragraphs (12)
through (16), respectively; and
(2) by inserting after paragraph (10) the following new paragraph:
`(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS- In
exercising the rights of disaffirmance or repudiation of a conservator or
receiver with respect to any qualified financial contract to which an
insured depository institution is a party, the conservator or receiver for
such institution shall either--
`(A) disaffirm or repudiate all qualified financial contracts
between--
`(i) any person or any affiliate of such person; and
`(ii) the depository institution in default; or
`(B) disaffirm or repudiate none of the qualified financial contracts
referred to in subparagraph (A) (with respect to such person or any
affiliate of such person).'.
SEC. 1005. 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 1 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. 1006. 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--
(A) by redesignating subparagraphs (B) through (D) as subparagraphs
(C) through (E), respectively;
(B) by inserting after subparagraph (A) the following new
subparagraph:
`(B) an uninsured national bank or an uninsured State bank that is a
member of the Federal Reserve System if the national bank or State member
bank is not eligible to make application to become an insured bank under
section 5 of the Federal Deposit Insurance Act;'; and
(C) by amending subparagraph (C) (as redesignated) to read as
follows:
`(C) a branch or agency of a foreign bank, a foreign bank and any
branch or agency of the foreign bank, or the foreign bank that established
the branch or agency, as those terms are defined in section 1(b) of the
International Banking Act of 1978;';
(2) in paragraph (11), by adding before the period `and any other
clearing organization with which such clearing organization has a netting
contract';
(3) by amending paragraph (14)(A)(i) to read as follows:
`(i) means a contract or agreement between 2 or more financial
institutions, clearing organizations, or members that provides for
netting present or future payment obligations or payment entitlements
(including liquidation or closeout values relating to such obligations
or entitlements) among the parties to the agreement; and';
and
(4) 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 amending subsection (a) to read as follows:
`(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).'; 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 1 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) 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 amending subsection (a) to read as follows:
`(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 1 or more
netting contracts between any 2 members of a clearing organization shall be
enforceable in accordance with their terms (except as provided in section
561(b)(2) of title 11, United States Code) and shall not be stayed, avoided,
or otherwise limited by any State or Federal law other than paragraphs (8)(E),
(8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act and
section 5(b)(2) of the Securities Investor Protection Act of 1970.'.
(d) ENFORCEABILITY OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND
UNINSURED FEDERAL BRANCHES AND AGENCIES- The Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.) is amended--
(1) by redesignating section 407 as section 408; and
(2) by adding after section 406 the following new section:
`SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND
UNINSURED FEDERAL BRANCHES AND AGENCIES.
`(a) IN GENERAL- Notwithstanding any other provision of law, paragraphs
(8), (9), (10), and (11) of section 11(e) of the Federal Deposit Insurance Act
shall apply to an uninsured national bank or uninsured Federal branch or
Federal agency except--
`(1) any reference to the `Corporation as receiver' or `the receiver or
the Corporation' shall refer to the receiver of an uninsured national bank
or uninsured Federal branch or Federal agency appointed by the Comptroller
of the Currency;
`(2) any reference to the `Corporation' (other than in section
11(e)(8)(D) of such Act), the `Corporation, whether acting as such or as
conservator or receiver', a `receiver', or a `conservator' shall refer to
the receiver or conservator of an uninsured national bank or uninsured
Federal branch or Federal agency appointed by the Comptroller of the
Currency; and
`(3) any reference to an `insured depository institution' or `depository
institution' shall refer to an uninsured national bank or an uninsured
Federal branch or Federal agency.
`(b) LIABILITY- The liability of a receiver or conservator of an uninsured
national bank or uninsured Federal branch or agency shall be determined in the
same manner and subject to the same limitations that apply to receivers and
conservators of insured depository institutions under section 11(e) of the
Federal Deposit Insurance Act.
`(c) REGULATORY AUTHORITY-
`(1) IN GENERAL- The Comptroller of the Currency, in consultation with
the Federal Deposit Insurance Corporation, may promulgate regulations to
implement this section.
`(2) SPECIFIC REQUIREMENT- In promulgating regulations to implement this
section, the Comptroller of the Currency shall ensure that the regulations
generally are consistent with the regulations and policies of the Federal
Deposit Insurance Corporation adopted pursuant to the Federal Deposit
Insurance Act.
`(d) DEFINITIONS- For purposes of this section, the terms `Federal
branch', `Federal agency', and `foreign bank' have the same meaning as in
section 1(b) of the International Banking Act.'.
SEC. 1007. BANKRUPTCY CODE AMENDMENTS.
(a) DEFINITIONS OF FORWARD CONTRACT, REPURCHASE AGREEMENT, SECURITIES
CLEARING AGENCY, SWAP AGREEMENT, COMMODITY CONTRACT, AND SECURITIES CONTRACT-
Title 11, United States Code, is amended--
(i) by striking `means a contract' and inserting
`means--
(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) a combination of agreements or transactions referred to in
subparagraphs (A) and (C);
`(C) an option to enter into an agreement or transaction referred to
in subparagraph (A) or (B);
`(D) a master netting agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), or (C), together with
all supplements to such master netting agreement, without regard to
whether such master netting agreement provides for an agreement or
transaction that is not a forward contract under this paragraph, except
that such master netting agreement shall be considered to be a forward
contract under this paragraph only with respect to each agreement or
transaction under such master netting agreement that is referred to in
subparagraph (A), (B) or (C); or
`(E) a security agreement or arrangement, or other credit enhancement,
directly pertaining to a contract, option, agreement, or transaction
referred to in subparagraph (A), (B), (C), or (D), but not to exceed the
actual value of such contract, option, agreement, or transaction on the
date of the filing of the petition;';
(B) by amending paragraph (47) to read as follows:
`(47) `repurchase agreement' and `reverse repurchase agreement'--
`(i) an agreement, including related terms, which provides for the
transfer of--
`(I) a certificate of deposit, mortgage-related security (as
defined in the Securities Exchange Act of 1934), mortgage loan,
interest in a mortgage-related security or mortgage loan, eligible
bankers' acceptance, qualified foreign government security;
or
`(II) security that is a direct obligation of, or that is fully
guaranteed by, the United States or an agency of the United States
against the transfer of funds by the transferee of such certificate of
deposit, eligible bankers' acceptance, security, loan, or
interest;
with a simultaneous agreement by such transferee to transfer to the
transferor thereof a certificate of deposit, eligible bankers'
acceptance, security, loan, or interest of the kind described in
subclause (I) or (II), at a date certain not later than 1 year after the
transferor's transfer or on demand, against the transfer of
funds;
`(ii) a 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 netting agreement that provides for an agreement or
transaction referred to in clause (i), (ii), or (iii), together with all
supplements to such master netting agreement, without regard to whether
such master netting agreement provides for an agreement or transaction
that is not a repurchase agreement under this subparagraph, except that
such master netting agreement shall be considered to be a repurchase
agreement under this subparagraph only with respect to each agreement or
transaction under such master netting agreement that is referred to in
clause (i), (ii), or (iii); or
`(v) a security agreement or arrangement, or other credit
enhancement, directly pertaining to a contract referred to in clause
(i), (ii), (iii), or (iv), but not to exceed the actual value of such
contract on the date of the filing of the petition; and
`(B) do not include a repurchase obligation under a participation in a
commercial mortgage loan;
and, for purposes of this paragraph, 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;';
(C) 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
(D) by amending paragraph (53B) to read as follows:
`(53B) `swap agreement' means--
`(A) an agreement, including the terms and conditions incorporated by
reference in such agreement, that 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 an equity swap, option, future, or forward
agreement;
`(v) a debt index or a debt swap, option, future, or forward
agreement;
`(vi) a credit spread or a credit swap, option, future, or forward
agreement; or
`(vii) a commodity index or a commodity swap, option, future, or
forward agreement;
`(B) an agreement or transaction similar to an agreement or
transaction referred to in this paragraph that--
`(i) is currently, or in the future becomes, regularly entered into
in the swap market (including terms and conditions incorporated by
reference therein); and
`(ii) is a forward, swap, future, or option on a rate, currency,
commodity, equity security, or other equity instrument, on a debt
security or other debt instrument, or on an economic index or measure of
economic risk or value;
`(C) a combination of agreements or transactions referred to in this
paragraph;
`(D) an option to enter into an agreement or transaction referred to
in this paragraph;
`(E) a master netting agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), (C), or (D), together
with all supplements to such master netting agreement and without regard
to whether such master netting agreement contains an agreement or
transaction described in any such subparagraph, but only with respect to
each agreement or transaction referred to in any such subparagraph that is
under such master netting agreement; or
`(F) is applicable for purposes of this title only and shall not be
construed or applied so as to challenge or affect the characterization,
definition, or treatment of any swap agreement under any other statute,
regulation, or rule, including the Securities Act of 1933, the Securities
Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the
Trust Indenture Act of 1939, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Securities Investor Protection Act of
1970, the Commodity Exchange Act, and the regulations prescribed by the
Securities and Exchange Commission or the Commodity Futures Trading
Commission.';
(2) by amending section 741(7) to read as follows:
`(7) `securities contract'--
`(i) a contract for the purchase, sale, or loan of a security, a
mortgage loan or an interest in a mortgage loan, a group or index of
securities, 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 of the
foregoing;
`(ii) an option entered into on a national securities exchange
relating to foreign currencies;
`(iii) the guarantee by or to a securities clearing agency of a
settlement of cash, securities, 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 of the foregoing;
`(v) any other agreement or transaction that is similar to an
agreement or transaction referred to in this subparagraph;
`(vi) a combination of the agreements or transactions referred to in
this subparagraph;
`(vii) an option to enter into an agreement or transaction referred
to in this subparagraph;
`(viii) a master netting 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 such master netting agreement,
without regard to whether such master netting agreement provides for an
agreement or transaction that is not a securities contract under this
subparagraph, except that such master netting agreement shall be
considered to be a securities contract under this subparagraph only with
respect to each agreement or transaction under such master netting
agreement that is referred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii); or
`(ix) a security agreement or arrangement, or other credit
enhancement, directly pertaining to a contract referred to in this
subparagraph, but not to exceed the actual value of such contract on the
date of the filing of the petition; and
`(B) does not include a purchase, sale, or repurchase obligation under
a participation in a commercial mortgage loan;'; and
(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) a combination of the agreements or transactions referred to in
this paragraph;
`(H) an option to enter into an agreement or transaction referred to
in this paragraph;
`(I) a master netting 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 netting agreement,
without regard to whether such master netting agreement provides for an
agreement or transaction that is not a commodity contract under this
paragraph, except that such master netting agreement shall be considered
to be a commodity contract under this paragraph only with respect to each
agreement or transaction under such master netting agreement that is
referred to in subparagraph (A), (B), (C), (D), (E), (F), (G), or (H);
or
`(J) a security agreement or arrangement, or other credit enhancement,
directly pertaining to a contract referred to in this paragraph, but not
to exceed the actual value of such contract on the date of the filing of
the petition;'.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINANCIAL PARTICIPANT, AND
FORWARD CONTRACT MERCHANT- Section 101 of title 11, United States Code, is
amended--
(1) by amending paragraph (22) to read as follows:
`(22) `financial institution' means--
`(A) a Federal reserve bank, or an entity 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 such Federal
reserve bank, receiver, or conservator or entity is acting as agent or
custodian for a customer in connection with a securities contract, as
defined in section 741 of this title, such customer; or
`(B) in connection with a securities contract, as defined in section
741 of this title, an investment company registered under the Investment
Company Act of 1940;';
(2) by inserting after paragraph (22) the following:
`(22A) `financial participant' means an entity that is a party to a
securities contract, commodity contract or forward contract, or on the date
of the filing of the petition, has a commodity contract (as defined in
section 761 of this title) with the debtor or any other entity (other than
an affiliate) of a total gross dollar value of at least $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 at least
$100,000,000 (aggregated across counterparties) in any such agreement or
transaction with the debtor or any other entity (other than an affiliate) on
any day during the previous 15-month period;'; and
(3) by amending paragraph (26) to read as follows:
`(26) `forward contract merchant' means a Federal reserve bank, or an
entity whose business consists in whole or in part of entering into forward
contracts as or with merchants or in a commodity, as defined or in section
761 of this title, or any similar good, article, service, right, or interest
which is presently or in the future becomes the subject of dealing or 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) the term `master netting agreement' means an agreement providing
for the exercise of rights, including rights of netting, setoff,
liquidation, termination, acceleration, or closeout, under or in connection
with 1 or more contracts that are described in any 1 or more of paragraphs
(1) through (5) of section 561(a), or any security agreement or arrangement
or other credit enhancement related to 1 or more of the foregoing. If a
master netting agreement contains provisions relating to agreements or
transactions that are not contracts described in paragraphs (1) through (5)
of section 561(a), the master netting agreement shall be deemed to be a
master netting agreement only with respect to those agreements or
transactions that are described in any 1 or more of the paragraphs (1)
through (5) of section 561(a);
`(38B) the term `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 120, 134, 139, 203 and 818, is amended--
(A) in paragraph (6), by inserting `, pledged to, and under the
control of,' after `held by';
(B) in paragraph (7), by inserting `, pledged to, and under the
control of,' after `held by';
(C) by amending paragraph (17) to read as follows:
`(17) under subsection (a), of the setoff by a swap participant of a
mutual debt and claim under or in connection with a swap agreement that
constitutes the setoff of a claim against the debtor for a payment or
transfer due from the debtor under or in connection with a swap agreement
against a payment due to the debtor from the swap participant under or in
connection with a swap agreement or against cash, securities, or other
property held by, pledged to, and under the control of, or due from such
swap participant to guarantee, secure, or settle a swap agreement;';
(D) in paragraph (27), by striking `or' at the end;
(E) in paragraph (28) by striking the period at the end and inserting
`; and'; and
(F) by inserting after paragraph (28) the following new
paragraph:
`(29) under subsection (a), of the setoff by a master netting agreement
participant of a mutual debt and claim under or in connection with 1 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 or and under the control of,
or due from such master netting agreement participant to margin, guarantee,
secure, or settle such agreements or any contract or agreement subject to
such agreements, to the extent 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, is amended
by adding at the end the following:
`(i) LIMITATION- The exercise of rights not subject to the stay arising
under subsection (a) pursuant to paragraph (6), (7), or (17) of subsection (b)
shall not be stayed by an 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';
(2) by redesignating subsection (g) (as added by section 222(a) of
Public Law 103-394) as subsection (i); and
(3) by inserting before subsection (i) (as redesignated) the following
new subsection:
`(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), and 548(b) of
this title, 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, and except to the extent the trustee could otherwise
avoid such a transfer made under an individual contract covered by such master
netting agreement, except under section 548(a)(1)(A) of this title.'.
(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';
(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,
with respect to a transfer under any individual contract covered thereby,
to the extent such master netting agreement participant otherwise did not
take (or is otherwise not deemed to have taken) such transfer for
value.'.
(g) TERMINATION OR ACCELERATION OF SECURITIES CONTRACTS- Section 555 of
title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
`Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract'; and
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(h) TERMINATION OR ACCELERATION OF COMMODITIES OR FORWARD CONTRACTS-
Section 556 of title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
`Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract'; and
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(i) TERMINATION OR ACCELERATION OF REPURCHASE AGREEMENTS- Section 559 of
title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
`Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement'; and
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF SWAP AGREEMENTS- Section
560 of title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
`Sec. 560. Contractual right to liquidate, terminate, or accelerate a swap
agreement'; and
(2) in the first sentence, by striking `termination of a swap agreement'
and inserting `liquidation, termination, or acceleration of a swap
agreement'; and
(3) by striking `in connection with any swap agreement' and inserting
`in connection with the termination, liquidation, or acceleration of a swap
agreement'.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR OFFSET UNDER A MASTER
NETTING AGREEMENT AND ACROSS CONTRACTS- Title 11, United States Code, is
amended by inserting after section 560 the following new section:
`Sec. 561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts
`(a) IN GENERAL- Subject to subsection (b), the exercise of any
contractual right, because of a condition of the kind specified in section
365(e)(1), to cause the termination, liquidation, or acceleration of or to
offset or net termination values, payment amounts or other transfer
obligations arising under or in connection with 1 or more (or the termination,
liquidation, or acceleration of 1 or more--
`(1) securities contracts, as defined in section 741(7);
`(2) commodity contracts, as defined in section 761(4);
`(4) repurchase agreements;
`(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.
`(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 of this title--
`(A) a party may not net or offset an obligation to the debtor arising
under, or in connection with, a commodity contract against any claim
arising under, or in connection with,
other instruments, contracts, or agreements listed in subsection (a) except
to the extent the party has no positive net equity in the commodity accounts at
the debtor, as calculated under subchapter IV;
`(B) another commodity broker may not net or offset an obligation to
the debtor arising under, or in connection with, a commodity contract
entered into or held on behalf of a customer of the debtor against any
claim arising under, or in connection with, other instruments, contracts,
or agreements listed in subsection (a).
`(c) DEFINITION- As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a national securities
exchange, a national securities association, or a securities clearing agency,
a right set forth in a bylaw of a clearing organization or contract market or
in a resolution of the governing board thereof, and a right, whether or not
evidenced in writing, arising under common law, under law merchant, or by
reason of normal business practice.'.
(l) MUNICIPAL BANKRUPTCIES- Section 901 of title 11, United States Code,
is amended--
(1) by inserting `, 555, 556' after `553'; and
(2) by inserting `, 559, 560, 561,' after `557'.
(m) ANCILLARY PROCEEDINGS- Section 304 of title 11, United States Code, is
amended by adding at the end the following:
`(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 ancillary to a
foreign proceeding under this section or any other section of this title, so
that enforcement of contractual provisions of such contracts and agreements in
accordance with their terms will not be stayed or otherwise limited by
operation of any provision of this title or by order of a court in any case
under this title, and to limit avoidance powers to the same extent as in a
proceeding under chapter 7 or 11 of this title (such enforcement not to be
limited based on the presence or absence of assets of the debtor in the United
States).'.
(n) 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, 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,
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.'.
(o) STOCKBROKER LIQUIDATIONS- Title 11, United States Code, is amended by
inserting after section 752 the following:
`Sec. 753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, securities clearing agencies,
swap participants, repo participants, and master netting agreement
participants
`Notwithstanding any other provision of this title, the exercise of rights
by a forward contract merchant, commodity broker, stockbroker, financial
institution, securities clearing agency, swap participant, repo participant,
financial participant, or master netting agreement participant under this
title shall not affect the priority of any unsecured claim it may have after
the exercise of such rights.'.
(p) SETOFF- Section 553 of title 11, United States Code, is amended--
(1) in subsection (a)(3)(C), by inserting `(except for a setoff of a
kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(19), 555,
556, 559, or 560 of this title)' before the period; and
(2) in subsection (b)(1), by striking `362(b)(14),' and inserting
`362(b)(17), 362(b)(19), 555, 556, 559, 560,'.
(q) SECURITIES CONTRACTS, COMMODITY CONTRACTS, AND FORWARD CONTRACTS-
Title 11, United States Code, is amended--
(1) in section 362(b)(6), by striking `financial institutions,' each
place such term appears and inserting `financial institution, financial
participant';
(2) in section 546(e), by inserting `financial participant' after
`financial institution,';
(3) in section 548(d)(2)(B), by inserting `financial participant' after
`financial institution,';
(A) by inserting `financial participant' after `financial
institution,'; and
(B) by inserting before the period `, a right set forth in a bylaw of
a clearing organization or contract market or in a resolution of the
governing board thereof, and a right, whether or not in writing, arising
under common law, under law merchant, or by reason of normal business
practice'; and
(5) in section 556, by inserting `, financial participant' after
`commodity broker'.
(r) CONFORMING AMENDMENTS- Title 11 of the United States Code is
amended--
(1) in the table of sections of 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 555 and 556 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 of chapter 7--
(A) by inserting after the item relating to section 766 the
following:
`767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions, securities clearing
agencies, swap participants, repo participants, and master netting agreement
participants.'; and
(B) by inserting after the item relating to section 752 the
following:
`753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, securities clearing agencies,
swap participants, repo participants, and master netting agreement
participants.'.
SEC. 1008. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)) is amended by adding at the end the following new subparagraph:
`(H) RECORDKEEPING REQUIREMENTS- The Corporation, in consultation with
the appropriate Federal banking agencies, may prescribe regulations
requiring more detailed recordkeeping with respect to qualified financial
contracts (including market valuations) by insured depository
institutions.'.
SEC. 1009. 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) 1 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. 1010. DAMAGE MEASURE.
(a) Title 11, United States Code, is amended--
(1) by inserting after section 561 the following:
`Sec. 562. Damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase agreements, or
master netting agreements
`If the trustee rejects a swap agreement, securities contract as defined
in section 741 of this title, forward contract, commodity contract (as defined
in section 761 of this title) repurchase agreement, or master netting
agreement pursuant to section 365(a) of this title, or if a forward contract
merchant, stockbroker, financial institution, securities clearing agency, repo
participant, financial participant, master netting agreement participant, or
swap participant liquidates, terminates, or accelerates such contract or
agreement, damages shall be measured as of the earlier of--
`(1) the date of such rejection; or
`(2) the date of such liquidation, termination, or acceleration.';
and
(2) in the table of sections of chapter 5 by inserting after the item
relating to section 561 the following:
`562. Damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase agreements, or
master netting agreements.'.
(b) CLAIMS ARISING FROM REJECTION- Section 502(g) of title 11, United
States Code, is amended--
(1) by designating the existing text as paragraph (1); and
(2) by adding at the end the following:
`(2) A claim for damages calculated in accordance with section 561 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. 1011. 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 after subparagraph (B) 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 Securities Investor Protection Corporation
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, each as defined in title 11, to
offset or net termination values, payment amounts, or other transfer
obligations arising under or in connection with 1 or more of such
contracts or agreements, or to foreclose on any cash collateral pledged
by the debtor whether or not with respect to 1 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 securities collateral
pledged by the debtor, whether or not with respect to 1 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 section, the term `contractual right'
includes a right set forth in a rule or bylaw of a national securities
exchange, a national securities association, or a securities clearing
agency, a right set forth in a bylaw of a clearing organization or
contract market or in a resolution of the governing board thereof, and a
right, whether or not in writing, arising under common law, under law
merchant, or by reason of normal business practice.'.
SEC. 1012. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is amended--
(1) in subsection (b), by striking `or' at the end of paragraph
(4);
(2) by redesignating paragraph (5) of subsection (b) as paragraph
(6);
(3) by inserting after paragraph (4) of subsection (b) the following new
paragraph:
`(5) any eligible asset (or proceeds thereof), to the extent that such
eligible asset was transferred by the debtor, before the date of
commencement of the case, to an eligible entity in connection with an
asset-backed securitization, except to the extent such asset (or proceeds or
value thereof) may be recovered by the trustee under section 550 by virtue
of avoidance under section 548(a); or'; and
(4) by adding at the end the following new subsection:
`(e) DEFINITIONS- For purposes of this section, the following definitions
shall apply:
`(1) ASSET-BACKED SECURITIZATION- The term `asset-backed securitization'
means a transaction in which eligible assets transferred to an eligible
entity are used as the source of payment on securities, the most senior of
which are rated investment grade by 1 or more nationally recognized
securities rating organizations, issued by an issuer;
`(2) ELIGIBLE ASSET- The term `eligible asset' means--
`(A) financial assets (including interests therein and proceeds
thereof), either fixed or revolving, including residential and commercial
mortgage loans, consumer receivables, trade receivables, and lease
receivables, that, by their terms, convert into cash within a finite time
period, plus any rights or other assets designed to assure the servicing
or timely distribution of proceeds to security holders;
`(3) ELIGIBLE ENTITY- The term `eligible entity' means--
`(B) a trust, corporation, partnership, or other entity engaged
exclusively in the business of acquiring and transferring eligible assets
directly or indirectly to an issuer and taking actions ancillary
thereto;
`(4) ISSUER- The term `issuer' means a trust, corporation, partnership,
or other entity engaged exclusively in the business of acquiring and holding
eligible assets, issuing securities backed by eligible assets, and taking
actions ancillary thereto.
`(5) TRANSFERRED- The term `transferred' means the debtor, pursuant to a
written agreement, represented and warranted that eligible assets were sold,
contributed, or otherwise conveyed with the intention of removing them from
the estate of the debtor pursuant to subsection (b)(5), irrespective,
without limitation of--
`(A) whether the debtor directly or indirectly obtained or held an
interest in the issuer or in any securities issued by the issuer;
`(B) whether the debtor had an obligation to repurchase or to service
or supervise the servicing of all or any portion of such eligible assets;
or
`(C) the characterization of such sale, contribution, or other
conveyance for tax, accounting, regulatory reporting, or other
purposes.'.
SEC. 1013. FEDERAL RESERVE COLLATERAL REQUIREMENTS.
The 2d sentence of the 2d undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 412) is amended by striking `acceptances
acquired under section 13 of this Act' and inserting `acceptances acquired
under section 10A, 10B, 13, or 13A of this Act'.
SEC. 1014. SEVERABILITY; EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) SEVERABILITY- If any provision of this Act or any amendment made by
this Act, or the application of any such provision or amendment to any person
or circumstance, is held to be unconstitutional, the remaining provisions of
and amendments made by this Act and the application of such other provisions
and amendments to any person or circumstance shall not be affected thereby.
(b) EFFECTIVE DATE- This Act shall take effect on the date of the
enactment of this Act.
(c) APPLICATION OF AMENDMENTS- The amendments made by this Act shall apply
with respect to cases commenced or appointments made under any Federal or
State law after the date of enactment of this Act, but shall not apply with
respect to cases commenced or appointments made under any Federal or State law
before the date of enactment of this Act.
TITLE XI--TECHNICAL CORRECTIONS
SEC. 1101. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by section 317, is
amended--
(1) by striking `In this title--' and inserting `In this title:';
(2) in each paragraph, by inserting `The term' after the paragraph
designation;
(3) in paragraph (35)(B), by striking `paragraphs (21B) and (33)(A)' and
inserting `paragraphs (23) and (35)';
(4) in each of paragraphs (35A) and (38), by striking `; and' at the end
and inserting a period;
(A) by inserting `who is not a family farmer' after `debtor' the first
place it appears; and
(B) by striking `thereto having aggregate' and all that follows
through the end of the paragraph;
(6) by amending paragraph (54) to read as follows:
`(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--
`(ii) an interest in property;';
(7) in each of paragraphs (1) through (35), in each of paragraphs (36)
and (37), and in each of paragraphs (40) through (55) (including paragraph
(54), as amended by paragraph (6) of this section), by striking the
semicolon at the end and inserting a period; and
(8) by redesignating paragraphs (4) through (55), including paragraph
(54), as amended by paragraph (6) of this section, in entirely numerical
sequence.
SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is amended by inserting
`522(f)(3), 707(b)(5),' after `522(d),' each place it appears.
SEC. 1103. 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. 1104. TECHNICAL AMENDMENTS.
Title 11 of the United States Code is amended--
(1) in section 109(b)(2) by striking `subsection (c) or (d) of';
(2) in section 541(b)(4) by adding `or' at the end; and
(3) in section 552(b)(1) by striking `product' each place it appears and
inserting `products'.
SEC. 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE
BANKRUPTCY PETITIONS.
Section 110(j)(3) of title 11, United States Code, is amended by striking
`attorney's' and inserting `attorneys' '.
SEC. 1106. 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. 1107. SPECIAL TAX PROVISIONS.
Section 346(g)(1)(C) of title 11, United States Code, is amended by
striking `, except' and all that follows through `1986'.
SEC. 1108. 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. 1109. AMENDMENT TO TABLE OF SECTIONS.
The table of sections for chapter 5 of title 11, United States Code, is
amended by striking the item relating to section 556 and inserting the
following:
`556. Contractual right to liquidate a commodities contract or forward
contract.'.
SEC. 1110. 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. 1111. PRIORITIES.
Section 507(a) of title 11, United States Code, as amended by section 323,
is amended--
(1) in paragraph (3)(B), by striking the semicolon at the end and
inserting a period; and
(2) in paragraph (7), by inserting `unsecured' after `allowed'.
SEC. 1112. EXEMPTIONS.
Section 522 of title 11, United States Code, as amended by section 320, is
amended--
(1) in subsection (f)(1)(A)(ii)(II)--
(A) by striking `includes a liability designated as' and inserting `is
for a liability that is designated as, and is actually in the nature of,';
and
(B) by striking `, unless' and all that follows through `support';
and
(2) in subsection (g)(2), by striking `subsection (f)(2)' and inserting
`subsection (f)(1)(B)'.
SEC. 1113. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a)(3), by striking `or (6)' each place it appears and
inserting `(6), or (15)';
(2) as amended by section 304(e) of Public Law 103-394 (108 Stat. 4133),
in paragraph (15), by transferring such paragraph so as to insert it after
paragraph (14) of subsection (a);
(3) in subsection (a)(9), by inserting `, watercraft, or aircraft' after
`motor vehicle';
(4) in subsection (a)(15), as so redesignated by paragraph (2) of this
subsection, by inserting `to a spouse, former spouse, or child of the debtor
and' after `(15)';
(5) in subsection (a)(17)--
(A) by striking `by a court' and inserting `on a prisoner by any
court';
(B) by striking `section 1915 (b) or (f)' and inserting `subsection
(b) or (f)(2) of section 1915'; and
(C) by inserting `(or a similar non-Federal law)' after `title 28'
each place it appears; and
(6) in subsection (e), by striking `a insured' and inserting `an
insured'.
SEC. 1114. 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) of this title, or that'.
SEC. 1115. 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. 1116. 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. 1117. PREFERENCES.
Section 547 of title 11, United States Code, is amended--
(1) in subsection (b), by striking `subsection (c)' and inserting
`subsections (c) and (h)'; and
(2) by adding at the end the following:
`(h) If the trustee avoids under subsection (b) a security interest given
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 security interest shall be considered to be avoided
under this section only with respect to the creditor that is an insider.'.
SEC. 1118. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is amended--
(1) by inserting `an interest in' after `transfer of';
(2) by striking `such property' and inserting `such real property';
and
(3) by striking `the interest' and inserting `such interest'.
SEC. 1119. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by striking
`1009,'.
SEC. 1120. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, as amended by section 408,
is amended by inserting `1123(d),' after `1123(b),'.
SEC. 1121. 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. Upon the filing of a report under the preceding
sentence--
`(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.
`(B) In the case of any dispute arising out of an election under
subparagraph (A), the court shall resolve the dispute.'.
SEC. 1122. 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. 1123. 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. 1124. DISCHARGE UNDER CHAPTER 12.
Subsections (a) and (c) of section 1228 of title 11, United States Code,
are amended by striking `1222(b)(10)' each place it appears and inserting
`1222(b)(9)'.
SEC. 1125. 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. 1126. 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. 1127. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.
(a) SALE OF PROPERTY OF ESTATE- Section 363(d) of title 11, United States
Code, is amended--
(1) 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 of this title.'.
(b) CONFIRMATION OF PLAN FOR REORGANIZATION- Section 1129(a) of title 11,
United States Code, as amended by section 143, is amended by adding at the end
the following:
`(15) 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, is
amended by adding at the end the following:
`(e) 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, except that the court
shall not confirm a plan under chapter 11 of this title 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 deemed to
require the court in which a case under chapter 11 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. 1128. 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.'.
SEC. 1129. 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. 1130. 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 of the United States Code may obtain judicial review of the final
agency decision by commencing an action in the United States district court
for the district for which the panel to which the trustee is appointed under
subsection (a)(1), or in the United States district court for the district in
which the trustee is appointed under subsection (b) resides, after first
exhausting all available administrative remedies, which if the trustee so
elects, shall also include an administrative hearing on the record. Unless the
trustee elects to have an administrative hearing on the record, the trustee
shall be deemed to have exhausted all administrative remedies for purposes of
this paragraph if the agency fails to make a final agency decision within 90
days after the trustee requests administrative remedies. The Attorney General
shall prescribe procedures to implement this paragraph. The decision of the
agency shall be affirmed by the district court unless it is unreasonable and
without cause based on the administrative record before the agency.'.
(b) EXPENSES OF STANDING TRUSTEES- Section 586(e) of title 28, United
States Code, is amended by adding at the end the following:
`(3) After first exhausting all available administrative remedies, an
individual appointed under subsection (b) may obtain judicial review of final
agency action to deny a claim of actual, necessary expenses under this
subsection by commencing an action in the United States district court in the
district where the individual resides. The decision of the agency shall be
affirmed by the district court unless it is unreasonable or without cause
based upon the administrative record before the agency.
`(4) The Attorney General shall prescribe procedures to implement this
subsection.'.
TITLE XII--GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
SEC. 1201. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) EFFECTIVE DATE- Except as provided otherwise in this Act, this Act and
the amendments made by this Act shall take effect 180 days after the date of
the enactment of this Act.
(b) APPLICATION OF AMENDMENTS- The amendments made by this Act shall not
apply with respect to cases commenced under title 11 of the United States Code
before the effective date of this Act.
END