S 625 IS
106th CONGRESS
1st Session
S. 625
To amend title 11, United States Code, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
March 16, 1999
Mr. GRASSLEY (for himself, Mr. TORRICELLI, Mr. BIDEN, and Mr. SESSIONS)
introduced the following bill; which was read twice and referred to the
Committee on the Judiciary
A BILL
To amend title 11, 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--NEEDS-BASED BANKRUPTCY
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Sec. 105. Credit counseling.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Violations of the automatic stay.
Sec. 204. Discouraging abuse of reaffirmation practices.
Subtitle B--Priority Child Support
Sec. 211. Priorities for claims for domestic support obligations.
Sec. 212. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 213. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 214. Nondischargeability of certain debts for alimony, maintenance,
and support.
Sec. 215. Continued liability of property.
Sec. 216. Protection of domestic support claims against preferential
transfer motions.
Sec. 217. Amendment to section 1325 of title 11, United States
Code.
Sec. 218. Definition of domestic support obligation.
Sec. 219. Collection of child support.
Subtitle C--Other Consumer Protections
Sec. 223. Debtor's bill of rights.
Sec. 225. Sense of Congress.
Sec. 226. Additional amendments to title 11, United States Code.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not
complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 308. Residency requirement for homestead exemption.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide
required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the
plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain
cases.
Sec. 319. Sense of the Congress regarding expansion of rule 9011 of the
Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
Sec. 401. Rolling stock equipment.
Sec. 402. Adequate protection for investors.
Sec. 403. Meetings of creditors and equity security holders.
Sec. 404. Protection of refinance of security interest.
Sec. 405. Executory contracts and unexpired leases.
Sec. 406. Creditors and equity security holders committees.
Sec. 407. Amendment to section 546 of title 11, United States
Code.
Sec. 409. Amendment to section 330(a) of title 11, United States
Code.
Sec. 410. Postpetition disclosure and solicitation.
Sec. 412. Venue of certain proceedings.
Sec. 413. Period for filing plan under chapter 11.
Sec. 414. Fees arising from certain ownership interests.
Sec. 415. Creditor representation at first meeting of creditors.
Sec. 416. Elimination of certain fees payable in chapter 11 bankruptcy
cases.
Sec. 417. Definition of disinterested person.
Sec. 418. Factors for compensation of professional persons.
Sec. 419. Appointment of elected trustee.
Subtitle B--Small Business Bankruptcy Provisions
Sec. 421. Flexible rules for disclosure statement and plan.
Sec. 422. Definitions; effect of discharge.
Sec. 423. Standard form disclosure statement and plan.
Sec. 424. Uniform national reporting requirements.
Sec. 425. Uniform reporting rules and forms for small business
cases.
Sec. 426. Duties in small business cases.
Sec. 427. Plan filing and confirmation deadlines.
Sec. 428. Plan confirmation deadline.
Sec. 429. Prohibition against extension of time.
Sec. 430. Duties of the United States trustee.
Sec. 431. Scheduling conferences.
Sec. 432. Serial filer provisions.
Sec. 433. Expanded grounds for dismissal or conversion and appointment
of trustee.
Sec. 434. Study of operation of title 11, United States Code, with
respect to small businesses.
Sec. 435. 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--IMPROVED BANKRUPTCY STATISTICS AND DATA
Sec. 601. Audit procedures.
Sec. 602. Improved bankruptcy statistics.
Sec. 603. Uniform rules for the collection of bankruptcy data.
Sec. 604. Sense of Congress regarding availability of bankruptcy
data.
TITLE VII--BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Effective notice to government.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Tolling of priority of tax claim time periods.
Sec. 706. Priority property taxes incurred.
Sec. 707. Chapter 13 discharge of fraudulent and other taxes.
Sec. 708. Chapter 11 discharge of fraudulent taxes.
Sec. 709. Stay of tax proceedings.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13
plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States
Code.
Sec. 802. Amendments to other chapters in title 11, United States
Code.
Sec. 803. Claims relating to insurance deposits in cases ancillary to
foreign proceedings.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
Sec. 901. Bankruptcy Code amendments.
Sec. 902. Damage measure.
Sec. 903. Asset-backed securitizations.
Sec. 904. Effective date; application of amendments.
TITLE X--PROTECTION OF FAMILY FARMERS
Sec. 1001. Reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Elimination of requirement that family farmer and spouse
receive over 50 percent of income from farming operation in year prior to
bankruptcy.
Sec. 1004. Certain claims owed to governmental units.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health
care business.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer
patients.
TITLE XII--TECHNICAL AMENDMENTS
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Special tax provisions.
Sec. 1208. Effect of conversion.
Sec. 1209. Allowance of administrative expenses.
Sec. 1212. Exceptions to discharge.
Sec. 1213. Effect of discharge.
Sec. 1214. Protection against discriminatory treatment.
Sec. 1215. Property of the estate.
Sec. 1217. Postpetition transactions.
Sec. 1218. Disposition of property of the estate.
Sec. 1219. General provisions.
Sec. 1220. Abandonment of railroad line.
Sec. 1221. Contents of plan.
Sec. 1222. Discharge under chapter 12.
Sec. 1223. Bankruptcy cases and proceedings.
Sec. 1224. Knowing disregard of bankruptcy law or rule.
Sec. 1225. Transfers made by nonprofit charitable corporations.
Sec. 1226. Protection of valid purchase money security interests.
Sec. 1228. Bankruptcy judgeships.
TITLE XIII--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1301. Effective date; application of amendments.
TITLE I--NEEDS-BASED BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended by inserting
`or consents to' after `requests'.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL- Section 707 of title 11, United States Code, is
amended--
(1) by striking the section heading and inserting the following:
`Sec. 707. Dismissal of a case or conversion to a case under chapter
13';
(A) by inserting `(1)' after `(b)';
(B) in paragraph (1), as redesignated by subparagraph (A) of this
paragraph--
(i) in the first sentence--
(I) by striking `but not at the request or suggestion' 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 next to last sentence; and
(C) by adding at the end the following:
`(2)(A)(i) In considering under paragraph (1) whether the granting of
relief would be an abuse of the provisions of this chapter, the court shall
presume abuse exists if the debtor's current monthly income reduced by the
amounts determined under clauses (ii), (iii), and (iv), and multiplied by 60
is not less than the lesser of--
`(I) 25 percent of the debtor's nonpriority unsecured claims in the
case; or
`(ii) The debtor's monthly expenses shall be the applicable monthly
(excluding payments for debts) expenses under standards 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--
`(I) the total of all amounts scheduled as contractually due to secured
creditors in each month of the 60 months following the date of the petition;
divided by
`(iv) The debtor's expenses for payment of all priority claims (including
priority child support and alimony claims) shall be calculated as--
`(I) the total amount of debts entitled to priority; divided by
`(B)(i) In any proceeding brought under this subsection, the presumption
of abuse may be rebutted by demonstrating special circumstances that justify
additional expenses or adjustments of current monthly total income. In order
to establish special circumstances, the debtor shall be required to--
`(I) itemize each additional expense or adjustment of income; and
`(aa) documentation for such expenses; and
`(bb) a detailed explanation of the special circumstances that make
such expenses necessary and reasonable.
`(ii) 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 adjustments to income are
required.
`(iii) The presumption of abuse may be rebutted if the additional expenses
or adjustments to income referred to in clause (i) cause the product of the
debtor's current monthly income reduced by the amounts determined under
clauses (ii), (iii), and (iv) of subparagraph (A) multiplied by 60 to be less
than the lesser of--
`(I) 25 percent of the debtor's nonpriority unsecured claims; or
`(C)(i) As part of the schedule of current income and expenditures
required under section 521, the debtor shall include a statement of the
debtor's current monthly income, and the calculations that determine whether a
presumption arises under subparagraph (A)(i), that shows how each such amount
is calculated.
`(ii) The Supreme Court shall promulgate rules under section 2075 of title
28, that prescribe a form for a statement under clause (i) and may provide
general rules on the content of the statement.
`(3) In considering under paragraph (1) whether the granting of relief
would be an abuse of the provisions of this chapter in a case in which the
presumption in subparagraph (A)(i) of such paragraph does not apply or has
been rebutted, the court shall consider--
`(A) whether the debtor filed the petition in bad faith; or
`(B) the totality of the circumstances (including whether the debtor
seeks to reject a personal services contract and the financial need for such
rejection as sought by the debtor) of the debtor's financial situation
demonstrates abuse.'.
(b) DEFINITION- Title 11, United States Code, is amended--
(1) in section 101, by inserting after paragraph (10) the
following:
`(10A) `current monthly income'--
`(A) means the average monthly income from all sources which the
debtor, or in a joint case, the debtor and the debtor's spouse, receive
without regard to whether the income is taxable income, derived during the
180-day period preceding the date of determination; and
`(B) includes any amount paid by any entity other than the debtor (or,
in a joint case, the debtor and the debtor's spouse), on a regular basis
to the household expenses of the debtor or the debtor's dependents (and,
in a joint case, the debtor's spouse if not otherwise a dependent);';
and
(A) by inserting `(a)' before `The trustee shall--'; and
(B) by adding at the end the following:
`(b)(1) With respect to an individual debtor under this chapter--
`(A) the United States trustee or bankruptcy administrator shall review
all materials filed by the debtor and, not later than 10 days before the
first meeting of creditors, file with the court a statement as to whether
the debtor's case would be presumed to be an abuse under section 707(b);
and
`(B) not later than 5 days after receiving a statement under
subparagraph (A), the court shall provide a copy of the statement to all
creditors.
`(2) The United States trustee or bankruptcy administrator shall not later
than 30 days after receiving a statement filed under paragraph (1) file a
motion to dismiss or convert under section 707(b), or file a statement setting
forth the reasons the United States trustee or bankruptcy administrator does
not believe that such a motion would be appropriate. If, based on the filing
of such statement with the court, the United States trustee or bankruptcy
administrator determines that the debtor's case should be presumed to be an
abuse under section 707(b) and the product of the debtor's current monthly
income, multiplied by 12 is not less than--
`(A) the highest national or applicable State median family income
reported for a family of equal or lesser size, whichever is greater;
or
`(B) in the case of a household of 1 person, the national or applicable
State median household income for 1 earner, whichever is greater.
`(3)(A) The court shall order the counsel for the debtor to reimburse the
panel trustee for all reasonable costs in prosecuting a motion brought under
section 707(b), including reasonable attorneys' fees, if--
`(i) a panel trustee appointed under section 586(a)(1) of title 28
brings a motion for dismissal or conversion under this subsection; and
`(I) grants that motion; and
`(II) finds that the action of the counsel for the debtor in filing
under this chapter was not substantially justified.
`(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).
`(4)(A) Except as provided in subparagraph (B) and subject to paragraph
(5), 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) 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 a total
current monthly income equal to or less than the national or applicable State
median family monthly income calculated on a monthly basis for a family of
equal size.'.
(c) CLERICAL AMENDMENT- The table of sections for chapter 7 of title 11,
United States Code, is amended by striking the item relating to section 707
and inserting the following:
`707. Dismissal of a case or conversion to a case under chapter
13.'.
SEC. 103. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is amended to read as
follows:
`(b)(1) 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 I of chapter 5) a written notice
prescribed by the United States trustee for the district in which the petition
is filed under section 586 of title 28.
`(2) The notice shall contain the following:
`(A) A brief description of chapters 7, 11, 12, and 13 and the general
purpose, benefits, and costs of proceeding under each of those
chapters.
`(B) 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--
(1) consult with a wide range of individuals who are experts in the
field of debtor education, including trustees who are appointed under
chapter 13 of title 11, United States Code, and who operate financial
management education programs for debtors; and
(2) develop a financial management training curriculum and materials
that may be used to educate individual debtors concerning how to better
manage their finances.
(1) IN GENERAL- 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) AVAILABILITY OF CURRICULUM AND MATERIALS- For a 1-year period
beginning not later than 270 days after the date of enactment of this Act,
the curriculum and materials referred to in paragraph (1) shall be made
available by the Director, directly or indirectly, on request to individual
debtors in cases filed during that 1-year period under chapter 7 or 13 of
title 11, United States Code.
(1) IN GENERAL- 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
issued on October 20, 1997, that are
representative of consumer education programs carried out by--
(ii) trustees serving under chapter 13 of title 11, United States
Code; and
(iii) consumer counseling groups.
(2) REPORT- Not later than 3 months after concluding the evaluation
under paragraph (1), 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 Congress, containing the
findings of the Director regarding the effectiveness of such curriculum,
such materials, and such programs.
SEC. 105. CREDIT COUNSELING.
(a) WHO MAY BE A DEBTOR- Section 109 of title 11, United States Code, is
amended by adding at the end the following:
`(h)(1) Subject to paragraphs (2) and (3), and notwithstanding any other
provision of this section, an individual may not be a debtor under this title
unless that individual has, during the 90-day period preceding the date of
filing of the petition of that individual, received from an approved nonprofit
credit counseling service described in section 111(a) an individual or group
briefing that outlined the opportunities for available credit counseling and
assisted that individual in performing a related budget analysis.
`(2)(A) Paragraph (1) shall not apply with respect to a debtor who resides
in a district for which the United States trustee or bankruptcy administrator
of the bankruptcy court of that district determines that the approved
nonprofit 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 1 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 nonprofit 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:
`(g) The court shall not grant a discharge under this section to a debtor,
unless after filing a petition the debtor has completed an instructional
course concerning personal financial management described in section 111.
`(h) Subsection (g) shall not apply with respect to a debtor who resides
in a district for which the United States trustee or bankruptcy administrator
of the bankruptcy court of that district determines that the approved
instructional courses are not adequate to service the additional individuals
who would be required to complete the instructional course by reason of the
requirements of this section.
`(i) Each United States trustee or bankruptcy administrator that makes a
determination described in subsection (h) shall review that determination not
later than 1 year after the date of that determination, and not less
frequently than every year thereafter.'.
(d) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, is
amended--
(1) by inserting `(a)' before `The debtor shall--'; and
(2) by adding at the end the following:
`(b) In addition to the requirements under subsection (a), an individual
debtor shall file with the court--
`(1) a certificate from the 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).'.
(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 for chapter 1 of title 11,
United States Code, is amended by adding at the end the following:
`111. Credit counseling services; financial management instructional
courses.'.
(f) LIMITATION- Section 362 of title 11, United States Code, is amended by
adding at the end the following:
`(i) If a case commenced under chapter 7, 11, or 13 of this title is
dismissed due to the creation of a debt repayment plan, for purposes of
subsection (c)(3), any subsequent case commenced by the debtor under any such
chapter shall not be presumed to be filed not in good faith.'.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.
(a) REDUCTION OF CLAIM- Section 502 of title 11, United States Code, is
amended by adding at the end the following:
`(k)(1) The court, on the motion of the debtor and after a hearing, may
reduce a claim filed under this section based in whole on unsecured consumer
debts by not more than 20 percent of the claim, if--
`(A) the claim was filed by a creditor who unreasonably refused to
negotiate a reasonable alternative repayment schedule proposed by an
approved credit counseling agency acting on behalf of the debtor;
`(B) the offer of the debtor under subparagraph (A)--
`(i) was made at least 60 days before the filing of the petition;
and
`(ii) provided for payment of at least 60 percent of the amount of the
debt over a period not to exceed the repayment period of the loan, or a
reasonable extension thereof; and
`(C) no part of the debt under the alternative repayment schedule is
nondischargeable.
`(2) The debtor shall have the burden of proving, by clear and convincing
evidence, that--
`(A) the creditor unreasonably refused to consider the debtor's
proposal; and
`(B) the proposed alternative repayment schedule was made in the 60-day
period specified in paragraph (1)(B)(i).'.
(b) LIMITATION ON AVOIDABILITY- Section 547 of title 11, United States
Code, is amended by adding at the end the following:
`(h) The trustee may not avoid a transfer if such transfer was made as a
part of an alternative repayment plan between the debtor and any creditor of
the debtor created by an approved credit counseling agency.'.
SEC. 202. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by adding at the
end the following:
`(i) The willful failure of a creditor to credit payments received under a
plan confirmed under this title (including a plan of reorganization confirmed
under chapter 11 of this title) 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).'.
SEC. 203. VIOLATIONS OF THE AUTOMATIC STAY.
Section 362(a) of title 11, United States Code, is amended--
(1) in paragraph (7), by striking `and' at the end;
(2) in paragraph (8), by striking the period at the end and inserting `;
and'; and
(3) by adding at the end the following:
`(9) any communication (other than a recitation of the creditor's legal
rights) threatening a debtor (for the purpose of coercing an agreement for
the reaffirmation of debt), at any time after the commencement and before
the granting of a discharge in a case under this title, of an intention
to--
`(i) determine the dischargeability of a debt; or
`(ii) under section 707(b), to dismiss or convert a case;
or
`(B) repossess collateral from the debtor to which the stay
applies.'.
SEC. 204. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.
(a) IN GENERAL- Section 524 of title 11, United States Code, as amended by
section 202 of this Act, is amended--
(i) in subparagraph (A), by striking `and' at the end;
(ii) in subparagraph (B), by inserting `and' at the end;
and
(iii) by adding at the end the following:
`(C)(i) the consideration for such agreement is based on a wholly
unsecured consumer debt; and
`(ii) such agreement contains a clear and conspicuous statement that
advises the debtor that--
`(I) the debtor is entitled to a hearing before the court at
which--
`(aa) the debtor shall appear in person; and
`(bb) the court shall decide whether the agreement constitutes an
undue hardship, is not in the debtor's best interest, or is not the
result of a threat by the creditor to take an action that, at the time
of the threat, that the creditor may not legally take or does not
intend to take; and
`(II) if the debtor is represented by counsel, the debtor may waive
the debtor's right to a hearing under subclause (I) by signing a
statement--
`(aa) waiving the hearing;
`(bb) stating that the debtor is represented by counsel;
and
`(cc) identifying the counsel.'; and
(B) in paragraph (6)(A)--
(i) in clause (i), by striking `and' at the end;
(ii) in clause (ii), by striking the period and inserting `and';
and
(iii) by adding at the end the following:
`(iii) not an agreement that the debtor entered into as a result of a
threat by the creditor to take an action that, at the time of the threat,
the creditor could not legally take or did not intend to take.'; and
(2) in subsection (d), in the third sentence, by inserting after `during
the course of negotiating an agreement' the following: `(or if the
consideration by such agreement is based on a wholly secured consumer debt,
and the debtor has not waived the right to a hearing under subsection
(c)(2)(C))'.
(1) IN GENERAL- Chapter 9 of title 18, United States Code, is amended by
adding at the end the following:
`Sec. 158. Designation of United States attorneys and agents of the Federal
Bureau of Investigation to address abusive reaffirmations of debt
`(a) IN GENERAL- The Attorney General of the United States shall designate
the individuals described in subsection (b) to have primary responsibility in
carrying out enforcement activities in addressing violations of section 152 or
157 relating to abusive reaffirmations of debt.
`(b) UNITED STATES DISTRICT ATTORNEYS AND AGENTS OF THE FEDERAL BUREAU OF
INVESTIGATION--The individuals referred to in subsection (a) are
`(1) a United States attorney for each judicial district of the United
States; and
`(2) an agent of the Federal Bureau of Investigation (within the meaning
of section 3107) for each field office of the Federal Bureau of
Investigation.
`(c) BANKRUPTCY INVESTIGATIONS- Each United States attorney designated
under this section shall have primary responsibility for carrying out the
duties of a United States attorney under section 3057.'.
(2) CLERICAL AMENDMENT- The analysis for chapter 9 of title 18, United
States Code, is amended by adding at the end the following:
`158. Designation of United States attorneys and agents of the Federal
Bureau of Investigation to address abusive reaffirmations of debt.'.
(c) EXCEPTIONS TO DISCHARGE- Section 523 of title 11, United States Code,
is amended by adding at the end the following:
`(f) Nothing in this section or in any other provision of this title shall
preempt any State law relating to unfair trade practices that imposes
restrictions on creditor conduct that would give rise to liability--
`(1) under this section; or
`(2) under section 524, for failure to comply with applicable
requirements for seeking a reaffirmation of debt.
`(g) ACTIONS BY STATES- The attorney general of a State, or an official or
agency designated by a State--
`(1) may bring an action on behalf of its residents to recover damages
on their behalf under subsection (d) or section 524(c); and
`(2) may bring an action in a State court to enforce a State criminal
law that is similar to section 152 or 157 of title 18.'.
Subtitle B--Priority Child Support
SEC. 211. 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. 212. 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), 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. 213. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b) of title 11, United States Code, is amended--
(1) by striking paragraph (2) and inserting the following:
`(2) under subsection (a)--
`(A) of the commencement 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 (17), by striking `or' at the end;
(3) in paragraph (18), by striking the period at the end and inserting a
semicolon; and
(4) by inserting after paragraph (18) the following:
`(19) under subsection (a) with respect to the withholding of income
under an order as specified in section 466(b) of the Social Security Act (42
U.S.C. 666(b)); or
`(20) under subsection (a) with respect to--
`(A) the withholding, suspension, or restriction of drivers' licenses,
professional and occupational licenses, and recreational licenses under
State law, as specified in section 466(a)(16) of the Social Security Act
(42 U.S.C. 666(a)(16)) 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. 214. 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. 215. 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. 216. 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. 217. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED STATES CODE.
Section 1325(b)(2) of title 11, United States Code, is amended by
inserting `(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)' after
`received by the debtor'.
SEC. 218. 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. 219. COLLECTION OF CHILD SUPPORT.
(a) DUTIES OF TRUSTEE UNDER CHAPTER 7- Section 704 of title 11, United
States Code, as amended by section 102(b) of this Act, is amended--
(A) in paragraph (8), by striking `and' at the end;
(B) in paragraph (9), by striking the period and inserting `; and';
and
(C) by adding at the end the following:
`(10) if, with respect to an individual debtor, there is a claim for
support of a child of the debtor or a custodial parent of such child
entitled to receive priority under section 507(a)(1), provide the applicable
notification specified in subsection (c).'; and
(2) by adding at the end the following:
`(c)(1) In any case described in subsection (a)(10), the trustee
shall--
`(A)(i) notify in writing the holder of the claim of the right of that
holder to use the services of a State child support enforcement agency
established under sections 464 and 466 of the Social Security Act (42 U.S.C.
654 and 666, respectively) for the State in which the holder resides;
and
`(ii) include in the notice under this paragraph the address and
telephone number of the child support enforcement agency; and
`(B)(i) notify in writing the State child support agency of the State in
which the holder of the claim resides of the claim;
`(ii) include in the notice under this paragraph the name, address, and
telephone number of the holder of the claim; and
`(iii) at such time as the debtor is granted a discharge under section
727, notify the holder of that claim and the State child support agency of
the State in which that holder resides of--
`(I) the granting of the discharge;
`(II) the last recent known address of the debtor; and
`(III) with respect to the debtor's case, the name of each creditor
that holds a claim--
`(aa) that is not discharged under paragraph (2), (4), or (14A) of
section 523(a); or
`(bb) that was reaffirmed by the debtor under section
524(c).
`(2)(A) If, after receiving a notice under paragraph (1)(B)(iii), a holder
of a claim or a State child support agency is unable to locate the debtor that
is the subject of the notice, that party may request from a creditor described
in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known address of the
debtor.
`(B) Notwithstanding any other provision of law, a creditor that makes a
disclosure of a last known address of a debtor in connection with a request
made under subparagraph (A) shall not be liable to the debtor or any other
person by reason of making that disclosure.'.
(b) DUTIES OF TRUSTEE UNDER CHAPTER 13- Section 1302 of title 11, United
States Code, as amended by section 102(b) of this Act, is amended--
(A) in paragraph (4), by striking `and' at the end;
(B) in paragraph (5), by striking the period and inserting `; and';
and
(C) by adding at the end the following:
`(6) if, with respect to an individual debtor, there is a claim for
support of a child of the debtor or a custodial parent of such child
entitled to receive priority under section 507(a)(1), provide the applicable
notification specified in subsection (d).'; and
(s) by adding at the end the following:
`(d)(1) In any case described in subsection (b)(6), the trustee shall--
`(A)(i) notify in writing the holder of the claim of the right of that
holder to use the services of a State child support enforcement agency
established under sections 464 and 466 of the Social Security Act (42 U.S.C.
654 and 666, respectively) for the State in which the holder resides;
and
`(ii) include in the notice under this paragraph the address and
telephone number of the child support enforcement agency; and
`(B)(i) notify in writing the State child support agency of the State in
which the holder of the claim resides of the claim; and
`(ii) include in the notice under this paragraph the name, address, and
telephone number of the holder of the claim;
`(iii) at such time as the debtor is granted a discharge under section
1328, notify the holder of the claim and the State child support agency of
the State in which that holder resides of--
`(I) the granting of the discharge;
`(II) the last recent known address of the debtor; and
`(III) with respect to the debtor's case, the name of each creditor
that holds a claim--
`(aa) that is not discharged under paragraph (2), (4), or (14A) of
section 523(a); or
`(bb) that was reaffirmed by the debtor under section
524(c).
`(2)(A) If, after receiving a notice under paragraph (1)(B)(iii), a holder
of a claim or a State child support agency is unable to locate the debtor that
is the subject of the notice, that party may request from a creditor described
in paragraph (1)(B)(iii)(III) (aa) or (bb) the last known address of the
debtor.
`(B) Notwithstanding any other provision of law, a creditor that makes a
disclosure of a last known address of a debtor in connection with a request
made under subparagraph (A) shall not be liable to the debtor or any other
person by reason of making that disclosure.'.
Subtitle C--Other Consumer Protections
SEC. 221. 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 nonexempt 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 under
section 110, 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 (12 U.S.C. 1813)) or any Federal credit
union or State credit union (as those terms are defined in section 101 of
the Federal Credit Union Act (12 U.S.C. 1751)), or any affiliate or
subsidiary of such a depository institution or credit union;'.
(b) CONFORMING AMENDMENT- Section 104(b)(1) of title 11, United States
Code, is amended by inserting `101(3),' after `sections'.
SEC. 222. 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).
`(2) To the extent not covered in the written notice described in
paragraph (1) and not later than 3 business days after the first date on
which a debt relief agency first offers to provide any bankruptcy assistance
services to an assisted person, a clear and conspicuous written notice
advising assisted persons that--
`(A) all information the assisted person is required to provide with a
petition and thereafter during a case under this title shall be complete,
accurate, and truthful;
`(B) all assets and all liabilities shall 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, shall be stated in those
documents if requested after reasonable inquiry to establish such
value;
`(C) total current monthly income, projected monthly net income and,
in a case under chapter 13, monthly net income shall be stated after
reasonable inquiry; and
`(D) information an assisted person provides during the case of that
person may be audited under this title and the 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 a substantially similar statement. The statement shall be clear
and conspicuous and shall be in a single document separate from other
documents or notices provided to the assisted person:
`IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER
`If you decide to seek bankruptcy relief, you can represent yourself, you
can hire an attorney to represent you, or you can get help in some localities
from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES
AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT
SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU
AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.
`The following information helps you understand what must be done in a
routine bankruptcy case to help you evaluate how much service you need.
Although bankruptcy can be complex, many cases are routine.
`Before filing a bankruptcy case, either you or your attorney should
analyze your eligibility for different forms of debt relief made available by
the Bankruptcy Code and which form of relief is most likely to be beneficial
for you. Be sure you understand the relief you can obtain and its limitations.
To file a bankruptcy case, documents called a Petition, Schedules and
Statement of Financial Affairs, as well as in some cases a Statement of
Intention need to be prepared correctly and filed with the bankruptcy court.
You will have to pay a filing fee to the bankruptcy court. Once your case
starts, you will have to attend the required first meeting of creditors where
you may be questioned by a court official called a `trustee' and by
creditors.
`If you choose to file a chapter 7 case, you may be asked by a creditor to
reaffirm a debt. You may want help deciding whether to do so and a creditor is
not permitted to coerce you into reaffirming your debts.
`If you choose to file a chapter 13 case in which you repay your creditors
what you can afford over 3 to 5 years, you may also want help with preparing
your chapter 13 plan and with the confirmation hearing on your plan which will
be before a bankruptcy judge.
`If you select another type of relief under the Bankruptcy Code other than
chapter 7 or chapter 13, you will want to find out what needs to be done from
someone familiar with that type of relief.
`Your bankruptcy case may also involve litigation. You are generally
permitted to represent yourself in litigation in bankruptcy court, but only
attorneys, not bankruptcy petition preparers, can give you legal advice.'.
`(c) Except to the extent the debt relief agency provides the required
information itself after reasonably diligent inquiry of the assisted person or
others so as to obtain such information reasonably accurately for inclusion on
the petition, schedules or statement of financial affairs, a debt relief
agency providing bankruptcy assistance to an assisted person, to the extent
permitted by nonbankruptcy law, shall provide each assisted person at the time
required for the notice required under subsection (a)(1) reasonably sufficient
information (which 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 total current
monthly income, projected monthly income and, in a case under chapter 13,
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
`(A) determine what property is exempt; and
`(B) value exempt property at replacement value, as defined in section
506.
`(d) A debt relief agency shall maintain a copy of the notices required
under subsection (a) of this section for a period of 2 years after the latest
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. 223. 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 222 of this Act, is amended by
adding at the end the following:
`Sec. 527. Debtor's bill of rights
`(a)(1) A debt relief agency shall--
`(A) not later than 5 business days after the first date on which a debt
relief agency provides any bankruptcy assistance services to an assisted
person, but before that assisted person's petition under this title is
filed--
`(i) 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
`(ii) give the assisted person a copy of the fully executed and
completed contract in a form the person is able to retain;
`(B) 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 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; and
`(C) 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.
`(2) For purposes of paragraph (1)(B), an advertisement shall be of
bankruptcy assistance services if that advertisement describes or offers
bankruptcy assistance with a plan under chapter 12, without regard to whether
chapter 13 is specifically mentioned. A statement such as `federally
supervised repayment plan' or `Federal debt restructuring help' or any other
similar statement that would lead a reasonable consumer to believe that help
with debts is being offered when in fact in most cases the help available is
bankruptcy assistance with a plan under chapter 13 is a statement covered
under the preceding sentence.
`(b) A debt relief agency shall not--
`(1) fail to perform any service that 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,
that--
`(A) is untrue and misleading; or
`(B) 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 may 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 under 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 222 of this Act, is amended by
inserting after the item relating to section 526 of title 11, United States
Code, the following:
`527. Debtor's bill of rights.'.
SEC. 224. ENFORCEMENT.
(a) ENFORCEMENT- Subchapter II of chapter 5 of title 11, United States
Code, as amended by section 223 of this Act, is amended by adding at the end
the following:
`Sec. 528. Debt relief agency enforcement
`(a) Any waiver by any assisted person of any protection or right provided
by or under section 526 or 527 shall be void and may not be enforced by any
Federal or State court or any other person.
`(b)(1) Any contract between a debt relief agency and an assisted person
for bankruptcy assistance that does not comply with the material requirements
of section 526 or 527 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 that 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; 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 that 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, 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, or engaged in a clear and
consistent pattern or practice of violating section 526 or 527, the court
may--
`(A) enjoin the violation of such section; or
`(B) impose an appropriate civil penalty against such person.
`(c) 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 section 223 of this Act, is amended by
inserting after the item relating to section 527 of title 11, United States
Code, the following:
`528. Debt relief agency enforcement.'.
SEC. 225. SENSE OF CONGRESS.
It is the sense of Congress that States should develop curricula relating
to the subject of personal finance, designed for use in elementary and
secondary schools.
SEC. 226. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
(a) Section 507(a) of title 11, United States Code, as amended by section
211 of this Act, 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'.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. REINFORCEMENT OF THE FRESH START.
Section 523(a)(17) of title 11, United States Code, is amended--
(1) by striking `by a court' and inserting `on a prisoner by any
court',
(2) by striking `section 1915(b) or (f)' and inserting `subsection (b)
or (f)(2) of section 1915', and
(3) by inserting `(or a similar non-Federal law)' after `title 28' each
place it appears.
SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking `and' at the end;
(2) in paragraph (2) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following:
`(3) if a single or joint case is filed by or against an individual
debtor under chapter 7, 11, or 13, and if a single or joint case of the
debtor was pending within the preceding 1-year period but was dismissed,
other than a case refiled under a chapter other than chapter 7 after
dismissal under section 707(b)--
`(A) the stay under subsection (a) with respect to any action taken
with respect to a debt or property securing such debt or with respect to
any lease will terminate with respect to the debtor on the 30th day after
the filing of the later case;
`(B) upon motion by a party in interest for continuation of the
automatic stay and upon notice and a hearing, the court may extend the
stay in particular cases as to any or all creditors (subject to such
conditions or limitations as the court may then impose) after notice and a
hearing completed before the expiration of the 30-day period only if the
party in interest demonstrates that the filing of the later case is in
good faith as to the creditors to be stayed; and
`(C) for purposes of subparagraph (B), a case is presumptively filed
not in good faith (but such presumption may be rebutted by clear and
convincing evidence to the contrary)--
`(i) as to all creditors, if--
`(I) more than 1 previous case under any of chapter 7, 11, or 13
in which the individual was a debtor was pending within the preceding
1-year period;
`(II) a previous case under any of chapter 7, 11, or 13 in which
the individual was a debtor was dismissed within such 1-year period,
after the debtor failed to--
`(aa) file or amend the petition or other documents as required by
this title or the court without substantial excuse (but mere inadvertence or
negligence shall not be a substantial excuse unless the dismissal was caused by
the negligence of the debtor's attorney);
`(bb) provide adequate protection as ordered by the court;
or
`(cc) perform the terms of a plan confirmed by the court; or
`(III) there has not been a substantial change in the financial or
personal affairs of the debtor since the dismissal of the next most
previous case under chapter 7, 11, or 13 of this title, or any other
reason to conclude that the later case will be
concluded--
`(aa) if a case under chapter 7 of this title, with a discharge;
or
`(bb) if a case under chapter 11 or 13 of this title, with a
confirmed plan which will be fully performed; and
`(ii) as to any creditor that commenced an action under subsection
(d) in a previous case in which the individual was a debtor if, as of
the date of dismissal of such case, that action was still pending or had
been resolved by terminating, conditioning, or limiting the stay as to
actions of such creditor; and
`(4)(A)(i) if a single or joint case is filed by or against an
individual debtor under this title, and if 2 or more single or joint cases
of the debtor were pending within the previous year but were dismissed,
other than a case refiled under section 707(b), the stay under subsection
(a) shall not go into effect upon the filing of the later case; and
`(ii) on request of a party in interest, the court shall promptly enter
an order confirming that no stay is in effect;
`(B) if, within 30 days after the filing of the later case, a party in
interest requests the court may order the stay to take effect in the case as
to any or all creditors (subject to such conditions or limitations as the
court may impose), after notice and hearing, only if the party in interest
demonstrates that the filing of the later case is in good faith as to the
creditors to be stayed;
`(C) a stay imposed under subparagraph (B) shall be effective on the
date of entry of the order allowing the stay to go into effect; and
`(D) for purposes of subparagraph (B), a case is presumptively not filed
in good faith (but such presumption may be rebutted by clear and convincing
evidence to the contrary)--
`(i) as to all creditors if--
`(I) 2 or more previous cases under this title in which the
individual was a debtor were pending within the 1-year
period;
`(II) a previous case under this title in which the individual was a
debtor was dismissed within the time period stated in this paragraph
after the debtor failed to file or amend the petition or other documents
as required by this title or the court without substantial excuse (but
mere inadvertence or negligence shall not be substantial excuse unless
the dismissal was caused by the negligence of the debtor's attorney),
failed to pay adequate protection as ordered by the court, or failed to
perform the terms of a plan confirmed by the court; or
`(III) there has not been a substantial change in the financial or
personal affairs of the debtor since the dismissal of the next most
previous case under this title, or any other reason to conclude that the
later case will not be concluded, if a case under chapter 7, with a
discharge, and if a case under chapter 11 or 13, with a confirmed plan
that will be fully performed; or
`(ii) as to any creditor that commenced an action under subsection (d)
in a previous case in which the individual was a debtor if, as of the date
of dismissal of such case, such action was still pending or had been
resolved by terminating, conditioning, or limiting the stay as to action
of such creditor.'.
SEC. 303. CURBING ABUSIVE FILINGS.
(a) IN GENERAL- Section 362(d) of title 11, United States Code, is
amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period at the end and inserting `;
or'; and
(3) by adding at the end the following:
`(4) with respect to a stay of an act against real property under
subsection (a), by a creditor whose claim is secured by an interest in such
real estate, if the court finds that the filing of the bankruptcy petition
was part of a scheme to delay, hinder, and defraud creditors that involved
either--
`(A) transfer of all or part ownership of, or other interest in, the
real property without the consent of the secured creditor or court
approval; or
`(B) multiple bankruptcy filings affecting the real property.
If recorded in compliance with applicable State laws governing notices of
interests or liens in real property, an order entered under this subsection
shall be binding in any other case under this title purporting to affect the
real property filed not later than 2 years after 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, as
amended by section 213 of this Act, is amended--
(1) in paragraph (19), by striking `or' at the end;
(2) in paragraph (20), by striking the period at the end; and
(3) by inserting after paragraph (20) the following:
`(21) under subsection (a), of any act to enforce any lien against or
security interest in real property following the entry of an order under
section 362(d)(4) as to that property in any prior bankruptcy case for a
period of 2 years after entry of such an order, except that the debtor, in a
subsequent case, may move the court for relief from such order based upon
changed circumstances or for other good cause shown, after notice and a
hearing; or
`(22) under subsection (a), of any act to enforce any lien against or
security interest in real property--
`(A) if the debtor is ineligible under section 109(g) to be a debtor
in a bankruptcy case; or
`(B) if the bankruptcy case was filed in violation of a bankruptcy
court order in a prior bankruptcy case prohibiting the debtor from being a
debtor in another bankruptcy case.'.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521(a), as so redesignated--
(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
within 45 days after the first meeting of creditors under section
341(a)--
`(A) enters into an agreement with the creditor under section 524(c)
with respect to the claim secured by such property; or
`(B) redeems such property from the security interest under section
722.'; and
(C) by adding at the end the following:
`(b) If the debtor fails to so act within the 45-day period specified in
subsection (a)(6), 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. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT COMPLETE
INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.
Title 11, United States Code, is amended--
(A) in subsection (c), by striking `(e), and (f)' and inserting `(e),
(f), and (h)'; and
(B) by redesignating subsection (h), as amended by section 227 of this
Act, as subsection (j) and by inserting after subsection (g) the
following:
`(h)(1) Subject to paragraph (2), in an individual case under 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 period of time set
by section 521(a)(2) to--
`(A) file timely any statement of intention required under section
521(a)(2) with respect to that property or to indicate therein that the
debtor--
`(i) will either surrender the property or retain the property;
and
`(ii) if retaining the property, will, as applicable--
`(I) redeem the property under section 722;
`(II) reaffirm the debt the property secures under section 524(c);
or
`(III) assume the unexpired lease under section 365(p) if the
trustee does not do so; or
`(B) take timely the action specified in that statement of intention, as
the statement may be amended before expiration of the period for taking
action, unless the statement of intention specifies reaffirmation and the
creditor refuses to reaffirm on the original contract terms.
`(2) Paragraph (1) shall not apply if 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 section 304 of this Act--
(A) in subsection (a)(2), as redesignated--
(i) by striking `consumer';
(ii) in subparagraph (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)';
and
(II) by striking `forty-five day period' and inserting `30-day
period'; and
(iii) in subparagraph (C), by inserting `except as provided in
section 362(h)' before the semicolon; and
(B) by adding at the end the following:
`(c) If the debtor fails timely to take the action specified in subsection
(a)(6), or in paragraph (1) or (2) of section 362(h), 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, nothing in this title shall
prevent or limit the operation of a provision in the underlying lease or
agreement that has the effect of placing the debtor in default under that
lease or agreement by reason of the occurrence, pendency, or existence of a
proceeding under this title or the insolvency of the debtor. Nothing in this
subsection shall be deemed to justify limiting such a provision in any other
circumstance.'.
SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
(a) IN GENERAL- Section 1325(a)(5)(B)(i) of title 11, United States Code,
is amended to read as follows:
`(i) the plan provides that--
`(I) the holder of such claim retain the lien securing such claim
until the earlier of--
`(aa) the payment of the underlying debt determined under
nonbankruptcy law; or
`(bb) discharge under section 1328; and
`(II) if the case under this chapter is dismissed or converted
without completion of the plan, such lien shall also be retained by such
holder to the extent recognized by applicable nonbankruptcy law;
and'.
(b) RESTORING THE FOUNDATION FOR SECURED CREDIT- Section 1325(a) of title
11, United States Code, is amended by adding at the end the following flush
sentence:
`For purposes of paragraph (5), section 506 shall not apply to a claim
described in that paragraph if the debt that is the subject of the claim was
incurred within the 5-year period preceding the filing of the petition and the
collateral for that debt consists of a motor vehicle (as defined in section
30102 of title 49) acquired for the personal use of the debtor, or if
collateral for that debt consists of any other thing of value, if the debt was
incurred during the 6-month period preceding that filing.'.
(c) DEFINITIONS- Section 101 of title 11, United States Code, as amended
by section 221 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 (27), the following:
`(27A) `incidental property' means, with respect to a debtor's principal
residence--
`(A) property commonly conveyed with a principal residence in the area
where the real estate is located;
`(B) all easements, rights, appurtenances, fixtures, rents, royalties,
mineral rights, oil or gas rights or profits, water rights, escrow funds,
or insurance proceeds; and
`(C) all replacements or additions;'.
SEC. 307. 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. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EXEMPTION.
Section 522 of title 11, United States Code, as amended by section 307 of
this Act, 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 on
the date of the filing of the petition, with the intent to hinder, delay, or
defraud a creditor and that the debtor could not exempt, or that portion that
the debtor could not exempt, under subsection (b) if on such date the debtor
had held the property so disposed of.'.
SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.
(a) STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13- Section 348(f)(1) of
title 11, United States Code, is amended--
(1) in subparagraph (A), by striking `and' at the end;
(2) in subparagraph (B)--
(A) by striking `in the converted case, with allowed secured claims'
and inserting `only in a case converted to 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 under the
plan at the time of conversion, in any proceeding under this title or
otherwise, the default shall have the effect given under applicable
nonbankruptcy law.'.
(b) GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL PROPERTY BY
ASSUMPTION- Section 365 of title 11, United States Code, is amended by adding
at the end the following:
`(p)(1) If a lease of personal property is rejected or not timely assumed
by the trustee under subsection (d), the leased property is no longer property
of the estate and the stay under section 362(a) is automatically
terminated.
`(2)(A) In the case of an individual under chapter 7, the debtor may
notify the creditor in writing that the debtor desires to assume the lease.
Upon being so notified, the creditor may, at its option, notify the debtor
that it is willing to have the lease assumed by the debtor and may condition
such assumption on cure of any outstanding default on terms set by the
contract.
`(B) If within 30 days after notice is provided under subparagraph (A),
the debtor notifies the lessor in writing that the lease is assumed, the
liability under the lease will be assumed by the debtor and not by the
estate.
`(C) The stay under section 362 and the injunction under section 524(a)(2)
shall not be violated by notification of the debtor and negotiation of cure
under this subsection.
`(3) In a case under chapter 11 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 and any stay under section 1301 is automatically terminated with
respect to the property subject to the lease.'.
(c) ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED
CREDITORS-
(1) IN GENERAL- Subchapter I of chapter 13 of title 11, United States
Code, is amended by inserting after section 1307 the following:
`Sec. 1308. 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), 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.
`(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 for--
`(1) payments to a creditor or lessor described in subsection (a)(1);
and
`(2) 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 the date that is 60 days after the filing of a case
under this chapter, a debtor retaining possession of personal property subject
to a lease or securing a claim attributable in whole or in part to the
purchase price of such property shall provide 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.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 13 of title
11, United States Code, is amended, in the matter relating to subchapter I,
by inserting after the item relating to section 1307 the following:
`1308. Adequate protection in chapter 13 cases.'.
SEC. 310. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States Code, is amended to read
as follows:
`(C)(i) for purposes of subparagraph (A)--
`(I) consumer debts owed to a single creditor and aggregating more
than $250 for luxury goods or services incurred by an individual debtor on
or within 90 days before the order for relief under this title are
presumed to be nondischargeable; and
`(II) cash advances aggregating more than $750 that are extensions of
consumer credit under an open end credit plan obtained by an individual
debtor on or within 70 days before the order for relief under this title,
are presumed to be nondischargeable; and
`(ii) for purposes of this subparagraph--
`(I) the term `extension of credit under an open end credit plan'
means an extension of credit under an open end credit plan, within the
meaning of the Consumer Credit Protection Act (15 U.S.C. 1601 et
seq.);
`(II) the term `open end credit plan' has the meaning given that term
under section 103 of Consumer Credit Protection Act (15 U.S.C. 1602);
and
`(III) the term `luxury goods or services' does not include goods or
services reasonably necessary for the support or maintenance of the debtor
or a dependent of the debtor.'.
SEC. 311. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended by section
303(b) of this Act, is amended--
(1) in paragraph (21), by striking `or' at the end;
(2) in paragraph (22), by striking the period at the end and inserting a
semicolon; and
(3) by inserting after paragraph (22) the following:
`(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;
`(24) under subsection (a)(3), of the commencement of any eviction,
unlawful detainer action, or similar proceeding by a lessor against a debtor
involving residential real property in which the debtor resides as a tenant
under a rental agreement that has terminated under the lease agreement or
applicable State law; or
`(25) under subsection (a)(3), of eviction actions based on endangerment
to property or person or the use of illegal drugs.'.
SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended--
(1) in section 727(a)(8), by striking `six' and inserting `8'; and
(2) in section 1328, by 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 if the debtor has received a discharge in any case filed under this title
within 5 years before the order for relief under this chapter.'.
SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
Section 522(f) of title 11, United States Code, is amended by adding at
the end the following:
`(4)(A) Subject to subparagraph (B), for purposes of paragraph (1)(B),
the term `household goods' means--
`(xi) educational materials and educational equipment primarily for
the use of minor dependent children of the debtor, but only 1 personal
computer only if used primarily for the education or entertainment of such
minor children;
`(xii) medical equipment and supplies;
`(xiii) furniture exclusively for the use of minor children, or
elderly or disabled dependents of the debtor; and
`(xiv) personal effects (including wedding rings and the toys and
hobby equipment of minor dependent children) of the debtor and the
dependents of the debtor.
`(B) The term `household goods' does not include--
`(i) works of art (unless by or of the debtor or the dependents of the
debtor);
`(ii) electronic entertainment equipment (except 1 television, 1
radio, and 1 VCR);
`(iii) items acquired as antiques;
`(iv) jewelry (except wedding rings); and
`(v) a computer (except as otherwise provided for in this section),
motor vehicle (including a tractor or lawn tractor), boat, or a motorized
recreational device, conveyance, vehicle, watercraft, or
aircraft.'.
SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.
Section 523(a) of title 11, United States Code, is amended by inserting
after paragraph (14) the following:
`(14A)(A) 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;
`(B) except that all debts incurred to pay nondischargeable debts shall
be presumed to be nondischargeable debts if incurred within 70 days before
the filing of the petition (except that, in any case in which there is an
allowed claim under section 502 for child support or spousal support
entitled to priority under section 507(a)(1) and that was filed in a timely
manner, debts that would otherwise be presumed to be nondischargeable debts
by reason of this subparagraph shall be treated as dischargeable
debts);'.
(b) DISCHARGE UNDER CHAPTER 13.
Section 1328(a) of title 11, United States Code, is amended by striking
paragraphs (1) through (3) and inserting the following:
`(1) provided for under section 1322(b)(5);
`(2) of the kind specified in paragraph (2), (4), (3)(B), (5), (8), or
(9) of section 523(a);
`(3) for restitution, or a criminal fine, included in a sentence on the
debtor's conviction of a crime; or
`(4) for restitution, or damages, awarded in a civil action against the
debtor as a result of willful or malicious injury by the debtor that caused
personal injury to an individual or the death of an individual.'.
SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13 CASES.
(a) NOTICE- Section 342 of title 11, United States Code, is amended--
(A) by inserting `(1)' after `(c)'; and
(B) by striking `, but the failure of such notice to contain such
information shall not invalidate the legal effect of such notice';
and
(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)(1) Notice given to a creditor other than as provided in this section
shall not be effective notice until that notice has been brought to the
attention of the creditor. If the creditor designates a person or department
to be responsible for receiving notices concerning bankruptcy cases and
establishes reasonable procedures so that bankruptcy notices received by the
creditor are to be delivered to such department or person, notice shall not be
considered to have been brought to the attention of the creditor until
received by such person or department.
`(2) No sanction under section 362(h) or any other sanction that a court
may impose on account of violations of the stay under section 362(a) or
failure to comply with section 542 or 543 may be imposed on any action of the
creditor unless the action takes place after the creditor has received notice
of the commencement of the case effective under this section.'.
(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as
amended by section 305 of this Act, is amended--
(1) in subsection (a), 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 under section 110(b)(1) indicating that such attorney or
bankruptcy petition preparer delivered to the debtor any notice
required by section 342(b); or
`(II) if no attorney for the debtor is indicated and no bankruptcy
petition preparer signed the petition, of the debtor that such notice
was obtained and read by the debtor;
`(iv) copies of 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 before the filing of the petition;
`(vi) a statement of the amount of projected monthly net income,
itemized to show how the amount is 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
(2) by adding at the end the following:
`(d)(1) At any time, a creditor, in the case of an individual under
chapter 7 or 13, may file with the court notice that the creditor requests the
petition, schedules, and a statement of affairs filed by the debtor in the
case and the court shall make those documents available to the creditor who
requests those documents.
`(2)(A) At any time, a creditor in a case under chapter 13 may file with
the court notice that the creditor requests the plan filed by the debtor in
the case.
`(B) The court shall make such plan available to the creditor who requests
such plan--
`(i) at a reasonable cost; and
`(ii) not later than 5 days after such request.
`(e) 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.
`(f)(1) A statement referred to in subsection (e)(4) shall disclose--
`(A) the amount and sources of income of the debtor;
`(B) the identity of any person responsible with the debtor for the
support of any dependent of the debtor; and
`(C) the identity of any person who contributed, and the amount
contributed, to the household in which the debtor resides.
`(2) The tax returns, amendments, and statement of income and expenditures
described in 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 (f).
`(g)(1) Not later than 30 days after the date of enactment of the
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 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 to--
`(i) further protect the confidentiality of tax information;
and
`(ii) provide penalties for the improper use by any person of the tax
information required to be provided under this section.
`(h) If requested by the United States trustee or a trustee serving in the
case, the debtor shall provide--
`(1) a document that establishes the identity of the debtor, including a
driver's license, passport, or other document that contains a photograph of
the debtor; and
`(2) such other personal identifying information relating to the debtor
that establishes the identity of the debtor.'.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE REQUIRED
INFORMATION.
Section 521 of title 11, United States Code, as amended by section 315 of
this Act, is amended by adding at the end the following:
`(i)(1) Notwithstanding section 707(a), and subject to paragraph (2), if
an individual debtor in a voluntary case under chapter 7 or 13 fails to file
all of the information required under subsection (a)(1) within 45 days after
the filing of the petition commencing the case, the case shall be
automatically dismissed effective on the 46th day after the filing of the
petition.
`(2) With respect to a case described in paragraph (1), any party in
interest may request the court to enter an order dismissing the case. If
requested, the court shall enter an order of dismissal not later than 5 days
after such request.
`(3) Upon request of the debtor made within 45 days after the filing of
the petition commencing a case described in paragraph (1), the court may allow
the debtor an additional period of not to exceed 45 days to file the
information required under subsection (a)(1) if the court finds justification
for extending the period for the filing.'.
SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE
PLAN.
(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 later than 45
days after the meeting of creditors under section 341(a).'.
(b) FILING OF PLAN- Section 1321 of title 11, United States Code, is
amended to read as follows:
`Sec. 1321. Filing of plan
`Not later than 90 days after the order for relief under this chapter, the
debtor shall file a plan, 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. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN CERTAIN CASES.
Section 1322(d) of title 11, United States Code, is amended to read as
follows:
`(d)(1) Except as provided in paragraph (2), the plan may not provide for
payments over a period that is longer than 3 years.
`(2) The plan may provide for payments over a period that is longer than 3
years if--
`(A) the plan is for a case that was converted to a case under this
chapter from a case under chapter 7, in which case the plan shall provide
for payments over a period of 5 years; or
`(B) the plan is for a case that is not described in subparagraph (A),
and the court, for cause, approves a period longer than 3 years, but not to
exceed 5 years.'.
SEC. 319. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE
FEDERAL RULES OF BANKRUPTCY PROCEDURE.
It is the sense of Congress that Rule 9011 of the Federal Rules of
Bankruptcy Procedure (11 U.S.C. App.) should be modified to include a
requirement that all documents (including schedules), signed and unsigned,
submitted to the court or to a trustee by debtors who represent themselves and
debtors who are represented by an attorney be submitted only after the debtor
or the debtor's attorney has made reasonable inquiry to verify that the
information contained in such documents is--
(1) well grounded in fact; and
(2) warranted by existing law or a good-faith argument for the
extension, modification, or reversal of existing law.
SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(e)'; and
(2) by adding at the end the following:
`(2) Notwithstanding paragraph (1), in the case of an individual filing
under chapter 7, 11, or 13, the stay under subsection (a) shall terminate on
the date that is 60 days after a request is made by a party in interest under
subsection (d), unless--
`(A) a final decision is rendered by the court during the 60-day period
beginning on the date of the request; or
`(B) that 60-day period is extended--
`(i) by agreement of all parties in interest; or
`(ii) by the court for such specific period of time as the court finds
is required for good cause, as described in findings made by the
court.'.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
SEC. 401. 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,
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), under such security agreement, lease, or conditional sale
contract that--
`(i) 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) 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) 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, 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 under 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 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.
`(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 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), under such security agreement, lease, or conditional sale
contract that occurs--
`(i) before the date of the order is cured before the expiration of
such 60-day period;
`(ii) 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) 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 under 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 under 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. 402. ADEQUATE PROTECTION FOR INVESTORS.
(a) DEFINITION- Section 101 of title 11, United States Code, is amended by
inserting after paragraph (48) the following:
`(48A) `securities self regulatory organization' means either a
securities association registered with the Securities and Exchange
Commission under section 15A of the Securities Exchange Act of 1934 (15
U.S.C. 78o-3) or a national securities exchange registered with the
Securities and Exchange Commission under section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f);'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as
amended by section 311 of this Act, is amended--
(1) in paragraph (24), by striking `or' at the end;
(2) in paragraph (25), by striking the period at the end and inserting
`; or'; and
(3) by inserting after paragraph (25) the following:
`(26) under subsection (a), of--
`(A) the commencement or continuation of an investigation or action by
a securities self regulatory organization to enforce such organization's
regulatory power;
`(B) the enforcement of an order or decision, other than for monetary
sanctions, obtained in an action by the securities self regulatory
organization to enforce such organization's regulatory power; or
`(C) any act taken by the securities self regulatory organization to
delist, delete, or refuse to permit quotation of any stock that does not
meet applicable regulatory requirements.'.
SEC. 403. 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. 404. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11, United
States Code, are each amended by striking `10' each place it appears and
inserting `30'.
SEC. 405. 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 120 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. 406. 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. 407. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.
Section 546 of title 11, United States Code, is amended--
(1) by redesignating the second subsection designated as subsection (g)
(as added by section 222(a) of Public Law 103-394) as subsection (i);
and
(2) by adding at the end the following:
`(j)(1) Notwithstanding section 545 (2) and (3), the trustee may not avoid
a warehouseman's lien for storage, transportation or other costs incidental to
the storage and handling of goods.
`(2) The prohibition under paragraph (1) shall be applied in a manner
consistent with any applicable State statute that is similar to section 7-209
of the Uniform Commercial Code.'.
SEC. 408. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code, is amended by
striking `20' and inserting `45'.
SEC. 409. AMENDMENT TO SECTION 330(a) OF TITLE 11, UNITED STATES CODE.
Section 330(a)(3) of title 11, United States Code, is amended--
(1) by striking `(A) the; and inserting `(i) the';
(2) by striking `(B)' and inserting `(ii)';
(3) by striking `(C)' and inserting `(iii)';
(4) by striking `(D)' and inserting `(iv)';
(5) by striking `(E)' and inserting `(v)';
(6) in subparagraph (A), by inserting `to an examiner, trustee under
chapter 11, or professional person' after `awarded'; and
(7) by adding at the end the following:
`(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. 410. 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. 411. PREFERENCES.
Section 547(c) of title 11, United States Code, is amended--
(1) by striking paragraph (2) and inserting the following:
`(2) to the extent that such transfer was in payment of a debt incurred
by the debtor in the ordinary course of business or financial affairs of the
debtor and the transferee, and such transfer was--
`(A) made in the ordinary course of business or financial affairs of
the debtor and the transferee; or
`(B) made according to ordinary business terms;';
(2) in paragraph (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 $5,000.'.
SEC. 412. 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. 413. 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) The 120-day period specified in paragraph (1) may not be extended
beyond a date that is 18 months after the date of the order for relief under
this chapter.
`(B) The 180-day period specified in paragraph (1) may not be extended
beyond a date that is 20 months after the date of the order for relief under
this chapter.'.
SEC. 414. 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 `but nothing in
this paragraph' 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, but nothing
in this paragraph'.
SEC. 415. 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 1
creditor) shall be permitted to appear at and participate in the meeting of
creditors in a case under chapter 7 or 13, either alone or in conjunction with
an attorney for the creditor. Nothing in this subsection shall be construed to
require any creditor to be represented by an attorney at any meeting of
creditors.'.
SEC. 416. 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 first sentence by striking `until the case is converted or
dismissed, whichever occurs first'; and
(2) in the second sentence--
(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. 417. 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. 418. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.
Section 330(a)(3) of title 11, United States Code, is amended--
(1) in subparagraph (D), by striking `and' at the end;
(2) by redesignating subparagraph (E) as subparagraph (F); and
(3) by inserting after subparagraph (D) the following:
`(E) with respect to a professional person, whether the person is board
certified or otherwise has demonstrated skill and experience in the
bankruptcy field;'.
SEC. 419. APPOINTMENT OF ELECTED TRUSTEE.
Section 1104(b) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(b)'; and
(2) by adding at the end the following:
`(2)(A) If an eligible, disinterested trustee is elected at a meeting of
creditors under paragraph (1), the United States trustee shall file a report
certifying that election.
`(B) Upon the filing of a report under subparagraph (A)--
`(i) the trustee elected under paragraph (1) shall be considered to have
been selected and appointed for purposes of this section; and
`(ii) the service of any trustee appointed under subsection (d) shall
terminate.
`(C) In the case of any dispute arising out of an election described in
subparagraph (A), the court shall resolve the dispute.'.
Subtitle B--Small Business Bankruptcy Provisions
SEC. 421. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125 of title 11, United States Code, is amended by striking
subsection (f) and inserting the following:
`(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 under 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 later than
20 days before the date of the hearing on confirmation of the plan;
and
`(C) the hearing on the disclosure statement may be combined with the
hearing on confirmation of a plan.'.
SEC. 422. DEFINITIONS; EFFECT OF DISCHARGE.
(a) DEFINITIONS- Section 101 of title 11, United States Code, is amended
by striking paragraph (51C) and inserting the following:
`(51C) `small business case' means a case filed under chapter 11 of this
title in which the debtor is a small business debtor;
`(51D) `small business debtor'--
`(A) subject to subparagraph (B), means a person (including any
affiliate of such person that is also a debtor 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) for
a case in which the United States trustee has appointed under section
1102(a)(1) a committee of unsecured creditors that the court has
determined is sufficiently active and representative to provide effective
oversight of the debtor; and
`(B) does not include any member of a group of affiliated debtors that
has aggregate noncontingent liquidated secured and unsecured debts in an
amount greater than $4,000,000 (excluding debt owed to 1 or more
affiliates or insiders);'.
(b) EFFECT OF DISCHARGE- Section 524 of title 11, United States Code, as
amended by section 204 of this Act, is amended by adding at the end the
following:
`(j)(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. 423. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
Within a reasonable period of time after the date of the enactment of this
Act, the Advisory Committee on Bankruptcy Rules of the Judicial Conference of
the United States shall propose for adoption standard form disclosure
statements and plans of reorganization for small business debtors (as defined
in section 101 of title 11, United States Code, as amended by this Act),
designed to achieve a practical balance between--
(1) the reasonable needs of the courts, the United States trustee,
creditors, and other parties in interest for reasonably complete
information; and
(2) economy and simplicity for debtors.
SEC. 424. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(1) IN GENERAL- Chapter 3 of title 11, United States Code, is amended by
inserting after section 307 the following:
`Sec. 308. Debtor reporting requirements
`(1) For purposes of this section, the term `profitability' means, with
respect to a debtor, the amount of money that the debtor has earned or lost
during current and recent fiscal periods.
`(2) A small business debtor shall file periodic financial and other
reports containing information including--
`(A) the debtor's profitability;
`(B) reasonable approximations of the debtor's projected cash receipts
and cash disbursements over a reasonable period;
`(C) comparisons of actual cash receipts and disbursements with
projections in prior reports;
`(D)(i) whether the debtor is--
`(I) in compliance in all material respects with postpetition
requirements imposed by this title and the Federal Rules of Bankruptcy
Procedure; and
`(II) timely filing tax returns and paying taxes and other
administrative claims when due; and
`(ii) if the debtor is not in compliance with the requirements referred
to in clause (i)(I) or filing tax returns and making the payments referred
to in clause (i)(II), what the failures are and how, at what cost, and when
the debtor intends to remedy such failures; and
`(iii) such other matters as are in the best interests of the debtor and
creditors, and in the public interest in fair and efficient procedures under
chapter 11 of this title.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 3 of title 11,
United States Code, is amended by inserting after the item relating to
section 307 the following:
`308. Debtor reporting requirements.'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take
effect 60 days after the date on which rules are prescribed under section 2075
of title 28, United States Code, to establish forms to be used to comply with
section 308 of title 11, United States Code, as added by subsection (a).
SEC. 425. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS- The Advisory Committee on Bankruptcy
Rules of the Judicial Conference of the United States shall propose for
adoption amended Federal Rules of Bankruptcy Procedure and Official Bankruptcy
Forms to be used by small business debtors to file periodic financial and
other reports containing information, including information relating to--
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements; and
(3) whether the debtor is timely filing tax returns and paying taxes and
other administrative claims when due.
(b) PURPOSE- The rules and forms proposed under subsection (a) shall be
designed to achieve a practical balance among--
(1) the reasonable needs of the bankruptcy court, the United States
trustee, creditors, and other parties in interest for reasonably complete
information;
(2) the small business debtor's interest that required reports be easy
and inexpensive to complete; and
(3) the interest of all parties that the required reports help the small
business debtor to understand the small business debtor's financial
condition and plan the small business debtor's future.
SEC. 426. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES IN CHAPTER 11 CASES- Title 11, 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 unless the court waives that requirement after
notice and
hearing, upon a finding of extraordinary and compelling circumstances;
`(3) timely file all schedules and statements of financial affairs,
unless the court, after notice and a hearing, grants an extension, which
shall not extend such time period to a date later than 30 days after the
date of the order for relief, absent extraordinary and compelling
circumstances;
`(4) file all postpetition financial and other reports required by the
Federal Rules of Bankruptcy Procedure or by local rule of the district
court;
`(5) subject to section 363(c)(2), maintain insurance customary and
appropriate to the industry;
`(6)(A) timely file tax returns;
`(B) subject to section 363(c)(2), timely pay all administrative expense
tax claims, except those being contested by appropriate proceedings being
diligently prosecuted; and
`(C) subject to section 363(c)(2), 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 that requirement after notice and hearing,
upon a finding of extraordinary and compelling circumstances; and
`(7) allow the United States trustee, or a designated representative of
the United States trustee, to inspect the debtor's business premises, books,
and records at reasonable times, after reasonable prior written notice,
unless notice is waived by the debtor.'.
(b) TECHNICAL AMENDMENT- The table of sections for 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. 427. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121 of title 11, United States Code, is amended by striking
subsection (e) and inserting the following:
`(e) In a small business case--
`(1) only the debtor may file a plan until after 90 days after the date
of the order for relief, unless that period is --
`(A) shortened on request of a party in interest made during the
90-day period;
`(B) extended as provided by this subsection, after notice and
hearing; or
`(C) 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), within which the plan shall be confirmed, may be
extended only if--
`(A) the debtor, after providing notice to parties in interest
(including the United States trustee), demonstrates by a preponderance of
the evidence that it is more likely than not that the court will confirm a
plan within a reasonable period of time;
`(B) a new deadline is imposed at the time the extension is granted;
and
`(C) the order extending time is signed before the existing deadline
has expired.'.
SEC. 428. 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).'.
SEC. 429. PROHIBITION AGAINST EXTENSION OF TIME.
Section 105(d) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking `and' at the end;
(2) in paragraph (2)(B)(vi), by striking the period at the end and
inserting `; and'; and
(3) 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), except as provided in section
1121(e)(3).'.
SEC. 430. 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 (5), by striking `and' at the end;
(3) in paragraph (6), by striking the period at the end and inserting `;
and'; and
(4) by inserting after paragraph (6) the following:
`(7) in each of such small business cases--
`(A) conduct an initial debtor interview as soon as practicable after
the entry of order for relief but before the first meeting scheduled under
section 341(a) of title 11, at which time the United States trustee
shall--
`(i) begin to investigate the debtor's viability;
`(ii) inquire about the debtor's business plan;
`(iii) explain the debtor's obligations to file monthly operating
reports and other required reports;
`(iv) attempt to develop an agreed scheduling order; and
`(v) inform the debtor of other obligations;
`(B) if determined to be appropriate and advisable, visit the
appropriate business premises of the debtor and ascertain the state of the
debtor's books and records and verify that the debtor has filed its tax
returns; and
`(C) review and monitor diligently the debtor's activities, to
identify as promptly as possible whether the debtor will be unable to
confirm a plan; and
`(8) in any case in which the United States trustee finds material
grounds for any relief under section 1112 of title 11, the United States
trustee shall apply promptly after making that finding to the court for
relief.'.
SEC. 431. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, as amended by section 429
of this Act, is amended--
(1) in the matter preceding paragraph (1) by striking `, may';
(2) by striking paragraph (1) and inserting the following:
`(1) shall hold such status conferences as are necessary to further the
expeditious and economical resolution of the case; and'; 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. 432. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is amended--
(1) in subsection (j), as redesignated by section 305(1) of this
Act--
(A) by striking `An' and inserting `(1) Except as provided in
paragraph (2), an'; and
(B) by adding at the end the following:
`(2) If such violation is based on an action taken by an entity in the
good faith belief that subsection (h) applies to the debtor, the recovery
under paragraph (1) against such entity shall be limited to actual damages.';
and
(2) by inserting after subsection (j), as added by section 419 of this
Act, the following:
`(k)(1) Except as provided in paragraph (2), 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--
`(A) is a debtor in a small business case pending at the time the
petition is filed;
`(B) was a debtor in a small business case that was dismissed for any
reason by an order that became final in the 2-year period ending on the date
of the order for relief entered with respect to the petition;
`(C) was a debtor in a small business case in which a plan was confirmed
in the 2-year period ending on the date of the order for relief entered with
respect to the petition; or
`(D) is an entity that has succeeded to substantially all of the assets
or business of a small business debtor described in subparagraph (A), (B),
or (C).
`(2) Paragraph (1) does not apply to the filing of a petition if the
debtor proves by a preponderance of the evidence that--
`(A) the filing of that petition resulted from circumstances beyond the
control of the debtor not foreseeable at the time the case then pending was
filed; and
`(B) it is more likely than not that the court will confirm a feasible
plan, but not a liquidating plan, within a reasonable period of
time.'.
SEC. 433. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT OF
TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION- Section 1112 of title
11, United States Code, is amended by striking subsection (b) and inserting
the following:
`(b)(1) Except as provided in paragraph (2), in subsection (c), and
section 1104(a)(3), on request of a party in interest, and after notice and a
hearing, the court shall convert a case under this chapter to a case under
chapter 7 or dismiss a case under this chapter, whichever is in the best
interest of creditors and the estate, if the movant establishes cause.
`(2) The relief provided in paragraph (1) shall not be granted if the
debtor or another party in interest objects and establishes by a preponderance
of the evidence that--
`(A) it is more likely than not that a plan will be confirmed
within--
`(i) a period of time fixed under this title or by order of the court
entered under section 1121(e)(3); or
`(ii) a reasonable period of time if no period of 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)(I) the act or omission will be cured within a reasonable period
of time fixed by the court, but 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
`(II) compelling circumstances beyond the control of the debtor
justify an extension.
`(3) The court shall commence the hearing on any motion under this
subsection not later than 30 days after filing of the motion, and shall decide
the motion 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.
`(4) 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) 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;
`(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.
`(5) The court shall commence the hearing on any motion under this
subsection not later than 30 days after filing of the motion, and shall decide
the motion 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,
but the court determines that the appointment of a trustee is in the best
interests of creditors and the estate.'.
SEC. 434. STUDY OF OPERATION OF TITLE 11, 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 of the United States, the Director of the Administrative
Office of United States Trustees, and the Director of the Administrative
Office of the United States Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that cause small businesses,
especially sole proprietorships, to become debtors in cases under title
11, United States Code, and that cause certain small businesses to
successfully complete cases under chapter 11 of such title; and
(B) how Federal laws relating to bankruptcy may be made more effective
and efficient in assisting small businesses to remain viable; and
(2) submit to the President pro tempore of the Senate and the Speaker of
the House of Representatives a report summarizing that study.
SEC. 435. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is amended--
(1) by inserting `or 30 days after the court determines that the debtor
is subject to this paragraph, whichever is later' after `90-day period)';
and
(2) by striking subparagraph (B) and inserting the following:
`(B) the debtor has commenced monthly payments that--
`(i) may, in the debtor's sole discretion, notwithstanding section
363(c)(2), be made from rents or other income generated before or after
the commencement of the case by or from the property to each creditor
whose claim is secured by such real estate (other than a claim secured
by a judgment lien or by an unmatured statutory lien); and
`(ii) are in an amount equal to interest at the then applicable
nondefault contract rate of interest on the value of the creditor's
interest in the real estate; or'.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICIPALITIES- Section 921(d) of
title 11, United States Code, is amended by inserting `, notwithstanding
section 301(b)' before the period at the end.
(b) CONFORMING AMENDMENT- Section 301 of title 11, United States Code, is
amended--
(1) by inserting `(a)' before `A voluntary'; and
(2) by striking the last sentence and inserting the following:
`(b) The commencement of a voluntary case under a chapter of this title
constitutes an order for relief under such chapter.'.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.
Section 901 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--IMPROVED BANKRUPTCY STATISTICS AND DATA
SEC. 601. AUDIT PROCEDURES.
(a) AMENDMENTS- Section 586 of title 28, United States Code, is
amended--
(1) in subsection (a), by striking paragraph (6) and inserting the
following:
`(6) make such reports as the Attorney General directs, including the
results of audits performed under 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.
`(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 if those variances occur by reason of higher
income or higher expenses than the statistical norm of the disctrict in
which the schedules were filed; and
`(iv) include procedures for providing, not less frequently than
annually, public information concerning the aggregate results of the audits
referred to in this subparagraph, 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 may 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 under section 3057 of title 18; and
`(ii) if advisable, take appropriate action, including commencing an
adversary proceeding to revoke the debtor's discharge under section 727(d)
of title 11.'.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11, UNITED STATES CODE- Paragraphs
(3) and (4) of section 521(a) of title 11, United States Code, as amended by
section 315 of this Act, are each amended by inserting `or an auditor
appointed under section 586 of title 28' after `serving in the case' each
place that term appears.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11, UNITED STATES CODE- Section
727(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period at the end and inserting `;
or'; and
(3) by adding at the end the following:
`(4) the debtor has failed to explain satisfactorily--
`(A) a material misstatement in an audit performed under section
586(f) of title 28; or
`(B) a failure to make available for inspection all necessary
accounts, papers, documents, financial records, files, and any other
papers, things, or property belonging to the debtor that are requested for
an audit conducted under section 586(f).'.
(d) EFFECTIVE DATE- The amendments made by this section shall take effect
18 months after the date of enactment of this Act.
SEC. 602. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT- Chapter 6 of title 28, United States Code, is amended by
adding at the end the following:
`Sec. 159. Bankruptcy statistics
`(a) The clerk of each district court 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 under section 2075 and filed by those
debtors;
`(B) the total current 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 the cases under each of subclauses (I) and (II), 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
during the 6-year period preceding the date of 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 for chapter 6 of title 28,
United States Code, is amended by adding at the end the following:
`159. Bankruptcy statistics.'.
(c) EFFECTIVE DATE- The amendments made by this section shall take effect
18 months after the date of enactment of this Act.
SEC. 603. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) AMENDMENT- Chapter 39 of title 28, United States Code, is amended by
inserting after section 589a the following:
`Sec. 589b. Bankruptcy data
`(a) Within a reasonable period of time after the effective date of this
section, the Attorney General of the United States shall 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) Each report referred to in subsection (a) shall be designed (and the
requirements as to place and manner of filing shall be established) so as to
facilitate compilation of data and maximum practicable access of the public,
by--
`(1) physical inspection at 1 or more central filing locations;
and
`(2) electronic access through the Internet or other appropriate
media.
`(c)(1) The information required to be filed in the reports referred to in
subsection (b) shall be information that is--
`(A) in the best interests of debtors and creditors, and in the public
interest; and
`(B) reasonable and adequate information to evaluate the efficiency and
practicality of the Federal bankruptcy system.
`(2) In issuing rules proposing the forms referred to in subsection (a),
the Attorney General shall strike the best achievable practical balance
between--
`(A) the reasonable needs of the public for information about the
operational results of the Federal bankruptcy system; and
`(B) economy, simplicity, and lack of undue burden on persons with a
duty to file reports.
`(d)(1) Final reports proposed for adoption by trustees under chapters 7,
12, and 13 of title 11 shall include with respect to a case under such title,
by appropriate category--
`(A) information about the length of time the case was pending;
`(D) receipts and disbursements of the estate;
`(E) expenses of administration;
`(H) distributions to claimants and claims discharged without
payment.
`(2) In cases under chapters 12 and 13 of title 11, final reports proposed
for adoption by trustees shall include--
`(A) the date of confirmation of the plan;
`(B) each modification to the plan; and
`(C) defaults by the debtor in performance under the plan.
`(3) The information described in paragraphs (1) and (2) shall be in
addition to such other matters as are required by law for a final report or as
the Attorney General, in the discretion of the Attorney General, may propose
for a final report.
`(e)(1) Periodic reports proposed for adoption by trustees or debtors in
possession under chapter 11 of title 11 shall include--
`(A) information about the standard industry classification, published
by the Department of Commerce, for the businesses conducted by the
debtor;
`(B) the length of time the case has been pending;
`(C) the number of full-time employees--
`(i) as of the date of the order for relief; and
`(ii) at the end of each reporting period since the case was
filed;
`(D) cash receipts, cash disbursements, and profitability of the debtor
for the most recent period and cumulatively since the date of the order for
relief;
`(E) 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;
`(F) all professional fees approved by the court in the case for the
most recent period and cumulatively since the date of the order for relief
(separately reported, for the professional fees incurred by or on behalf of
the debtor, between those that would have been incurred absent a bankruptcy
case and those that would not have been so incurred); and
`(G) 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.
`(2) The information described in paragraph (1) shall be in addition to
such other matters as are required by law for a periodic report or as the
Attorney General, in the discretion of the Attorney General, may propose for a
periodic report.'.
(b) TECHNICAL AMENDMENT- The table of sections for chapter 39 of title 28,
United States Code, is amended by adding at the end the following:
`589b. Bankruptcy data.'.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY DATA.
It is the sense of Congress that--
(1) it should be the national policy of the United States that all data
held by bankruptcy clerks in electronic form, to the extent such data
reflects only public records (as defined in section 107 of title 11, United
States Code), should be released in a usable electronic form in bulk to the
public subject to such appropriate privacy concerns and safeguards as the
Judicial Conference of the United States may determine; and
(2) there should be established a bankruptcy data system in
which--
(A) a single set of data definitions and forms are used to collect
data nationwide; and
(B) data for any particular bankruptcy case are aggregated in the same
electronic record.
TITLE VII--BANKRUPTCY TAX PROVISIONS
SEC. 701. TREATMENT OF CERTAIN LIENS.
(a) TREATMENT OF CERTAIN LIENS- Section 724 of title 11, United States
Code, is amended--
(1) in subsection (b), in the matter preceding paragraph (1), by
inserting `(other than to the extent that there is a properly perfected
unavoidable tax lien arising in connection with an ad valorem tax on real or
personal property of the estate)' after `under this title';
(2) in subsection (b)(2), by inserting `(except that such expenses,
other than claims for wages, salaries, or commissions which arise after the
filing of a petition, shall be limited to expenses incurred under chapter 7
of this title and shall not include expenses incurred under chapter 11 of
this title)' after `507(a)(1)'; and
(3) by adding at the end the following:
`(e) Before subordinating a tax lien on real or personal property of the
estate, the trustee shall--
`(1) exhaust the unencumbered assets of the estate; and
`(2) in a manner consistent with section 506(c), recover from property
securing an allowed secured claim the reasonable, necessary costs, and
expenses of preserving or disposing of that property.
`(f) Notwithstanding the exclusion of ad valorem tax liens under this
section and subject to the requirements of subsection (e), the following may
be paid from property of the estate which secures a tax lien, or the proceeds
of such property:
`(1) Claims for wages, salaries, and commissions that are entitled to
priority under section 507(a)(3).
`(2) Claims for contributions to an employee benefit plan entitled to
priority under section 507(a)(4).'.
(b) DETERMINATION OF TAX LIABILITY- Section 505(a)(2) of title 11, United
States Code, is amended--
(1) in subparagraph (A), by striking `or' at the end;
(2) in subparagraph (B), by striking the period at the end and inserting
`; or'; and
(3) by adding at the end the following:
`(C) the amount or legality of any amount arising in connection with an
ad valorem tax on real or personal property of the estate, if the applicable
period for contesting or redetermining that amount under any law (other than
a bankruptcy law) has expired.'.
SEC. 702. EFFECTIVE NOTICE TO GOVERNMENT.
(a) EFFECTIVE NOTICE TO GOVERNMENTAL UNITS- Section 342 of title 11,
United States Code, as amended by section 315(a) of this Act, is amended by
adding at the end the following:
`(g)(1) 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,
applicable rule, other provision of law, or order of the court, shall identify
the department, agency, or instrumentality through which the debtor is
indebted.
`(2) The debtor shall identify (with information such as a taxpayer
identification number, loan, account or contract number, or real estate parcel
number, if applicable), and describe the underlying basis for the claim of the
governmental unit.
`(3) If the liability of the debtor 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 that
individual, entity, organization, or name.
`(h) The clerk shall keep and update on a quarterly basis, in such form
and manner as the Director of the Administrative Office of the United States
Courts prescribes, a register in which a governmental unit may designate or
redesignate a mailing address for service of notice in cases pending in the
district. The clerk shall make such register available to debtors.'.
(b) ADOPTION OF RULES PROVIDING NOTICE-
(1) IN GENERAL- Within a reasonable period of time after the date of
enactment of this Act, the Advisory Committee on Bankruptcy Rules of the
Judicial Conference shall propose for adoption enhanced rules for providing
notice to Federal, State, and local government units that have regulatory
authority over the debtor or that may be creditors in the debtor's
case.
(2) PERSONS NOTIFIED- The rules proposed under paragraph (1) shall be
reasonably calculated to ensure that notice will reach the representatives
of the governmental unit (or subdivision thereof) who will be the
appropriate persons authorized to act upon the notice.
(3) RULES REQUIRED- At a minimum, the rules under paragraph (1) should
require that the debtor--
(A) identify in the schedules and the notice, the subdivision, agency,
or entity with respect to which such notice should be received;
(B) 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 in any case in
which--
(i) the debtor may be a successor in interest; or
(ii) may not be the same entity as the entity that incurred the debt
or obligation; and
(C) identify, in appropriate schedules, served together with the
notice--
(i) the property with respect to which the claim or regulatory
obligation may have arisen, if applicable;
(ii) the nature of such claim or regulatory obligation;
and
(iii) 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:
`(i) 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--
`(1) timely notice was given in a manner reasonably calculated to
satisfy the requirements of this section; and
`(A) the notice was timely sent to the address provided in the
register maintained by the clerk of the district in which the case was
pending for such purposes; or
`(B) no 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. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
The second sentence of section 505(b) of title 11, United States Code, is
amended by striking `Unless' and inserting `If the request is made
substantially in the manner designated by the governmental unit and
unless'.
SEC. 704. RATE OF INTEREST ON TAX CLAIMS.
(a) IN GENERAL- Subchapter I of chapter 5 of title 11, United States Code,
is amended by adding at the end the following:
`Sec. 511. Rate of interest on tax claims
`If any provision of this title requires the payment of interest on a tax
claim or the payment of interest to enable a creditor to receive the present
value of the allowed amount of a tax claim, the rate of interest shall be as
follows:
`(1) In the case of secured tax claims, unsecured ad valorem tax claims,
other unsecured tax claims in which interest is required to be paid under
section 726(a)(5), and administrative tax claims paid under section
503(b)(1), the rate shall be determined under applicable nonbankruptcy
law.
`(2)(A) In the case of any tax claim other than a claim described in
paragraph (1), the minimum rate of interest shall be a percentage equal to
the sum of--
`(ii) the Federal short-term rate rounded to the nearest full percent,
determined under section 1274(d) of the Internal Revenue Code of
1986.
`(B) In the case of any claim for Federal income taxes, the minimum rate
of interest shall be subject to any adjustment that may be required under
section 6621(d) of the Internal Revenue Code of 1986.
`(C) In the case of taxes paid under a confirmed plan or reorganization
under this title, the minimum rate of interest shall be determined as of the
calendar month in which the plan is confirmed.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 5 of title 11,
United States Code, is amended by inserting after the item relating to section
510 the following:
`511. Rate of interest on tax claims.'.
SEC. 705. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.
Section 507(a)(8)(A) of title 11, United States Code, as redesignated by
section 221 of this Act, is amended--
(1) in clause (i), by inserting before the semicolon at the end, the
following: `, plus any time during which the stay of proceedings was in
effect in a prior case under this title, plus 6 months'; and
(2) by striking clause (ii) and inserting the following:
`(ii) assessed within 240 days before the date of the filing of the
petition, exclusive of--
`(I) any time during which an offer in compromise with respect to
that tax, was pending or in effect during that 240-day period, plus 30
days;
`(aa) any time during which an installment agreement with respect to
that tax was pending or in effect during that 240-day period, plus 30 days;
or
`(bb) 1 year; and
`(III) any time during which a stay of proceedings against
collections was in effect in a prior case under this title during that
240-day period; plus 6 months.'.
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(9)(B) of title 11, United States Code, as redesignated by
section 221 of this Act, is amended by striking `assessed' and inserting
`incurred'.
SEC. 707. CHAPTER 13 DISCHARGE OF FRAUDULENT AND OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code, as amended by section
228 of this Act, is amended by inserting `(1),' after `paragraph'.
SEC. 708. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, is amended by adding at
the end the following:
`(5) Notwithstanding paragraph (1), the confirmation of a plan does not
discharge a debtor that is a corporation from any debt for a tax or customs
duty with respect to which the debtor--
`(A) made a fraudulent return; or
`(B) willfully attempted in any manner to evade or defeat that tax or
duty.'.
SEC. 709. STAY OF TAX PROCEEDINGS.
(a) SECTION 362 STAY LIMITED TO PREPETITION TAXES- Section 362(a)(8) of
title 11, United States Code, is amended by inserting before the semicolon at
the end the following: `, with respect to a tax liability for a taxable period
ending before the order for relief under section 301, 302, or 303'.
(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. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.
Section 1129(a)(9) of title 11, United States Code, is amended--
(1) in subparagraph (B), by striking `and' at the end; and
(2) in subparagraph (C), by striking `deferred cash payments, over a
period not exceeding six years after the date of assessment of such claim,'
and all that follows through the end of the subparagraph, and inserting
`regular installment payments--
`(i) of a total value, as of the effective date of the claim, equal
to the allowed amount of such claim in cash, but in no case with a
balloon payment; and
`(ii) beginning not later than the effective date of the plan and
ending on the earlier of--
`(I) the date that is 5 years after the date of the filing of the
petition; or
`(II) the last date payments are to be made under the plan to
unsecured creditors; and'; and
(3) by adding at the end the following:
`(D) with respect to a secured claim which would otherwise meet the
description on an unsecured claim of a governmental unit under section
507(a)(8), but for the secured status of that claim, the holder of that
claim will receive on account of that claim, cash payments, in the same
manner and over the same period, as prescribed in subparagraph
(C).'.
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended by striking the
semicolon at the end and inserting `, except in any case in which a purchaser
is a purchaser described in section 6323 of the Internal Revenue Code of 1986,
or in any other similar provision of State or local law;'.
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.
(a) PAYMENT OF TAXES REQUIRED- Section 960 of title 28, United States
Code, is amended--
(1) by inserting `(a)' before `Any'; and
(2) by adding at the end the following:
`(b) A tax under subsection (a) shall be paid when due in the conduct of
business unless--
`(1) the tax is a property tax secured by a lien against property that
is abandoned within a reasonable period of time after the lien attaches, by
the trustee of a bankruptcy estate, under section 554 of title 11; or
`(2) payment of the tax is excused under a specific provision of title
11.
`(c) In a case pending under chapter 7 of title 11, payment of a tax may
be deferred until final distribution is made under section 726 of title 11,
if--
`(1) the tax was not incurred by a trustee duly appointed under chapter
7 of title 11; or
`(2) before the due date of the tax, the court makes a finding of
probable insufficiency of funds of the estate to pay in full the
administrative expenses allowed under section 503(b) of title 11 that have
the same priority in distribution under section 726(b) of title 11 as the
priority of that tax.'.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED- Section 503(b)(1)(B)(i) of title
11, United States Code, is amended by inserting `whether secured or unsecured,
including property taxes for which liability is in rem, in personam, or both,'
before `except'.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE TAXES ELIMINATED-
Section 503(b)(1) of title 11, United States Code, is amended--
(1) in subparagraph (B), by striking `and' at the end;
(2) in subparagraph (C), by adding `and' at the end; and
(3) by adding at the end the following:
`(D) notwithstanding the requirements of subsection (a), a governmental
unit shall not be required to file a request for the payment of 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 with respect to the property' before the period at
the end.
SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is amended by striking
`before the date on which the trustee commences distribution under this
section;' and inserting the following: `on or before the earlier of--
`(A) the date that is 10 days after the mailing to creditors of the
summary of the trustee's final report; or
`(B) the date on which the trustee commences final distribution under
this section;'.
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a) of title 11, United States Code, is amended--
(1) in paragraph (1)(B)--
(A) by inserting `or equivalent report or notice,' after `a
return,';
(i) by inserting `or given' after `filed'; and
(ii) by striking `or' at the end; and
(i) by inserting `or given' after `filed'; and
(ii) by inserting `, report, or notice' after `return';
and
(2) by adding at the end the following flush sentences:
`For purposes of this subsection, the term `return' means a return that
satisfies the requirements of applicable nonbankruptcy law (including
applicable filing requirements). Such term includes a return prepared pursuant
to section 6020(a) of the Internal Revenue Code of 1986, or similar State or
local law, or a written stipulation to a judgment entered by a nonbankruptcy
tribunal, but does not include a return made pursuant to section 6020(b) of
the Internal Revenue Code of 1986, or a similar State or local law.'.
SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.
The second sentence of section 505(b) of title 11, United States Code, as
amended by section 703 of this Act, is amended by inserting `the estate,'
after `misrepresentation,'.
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.
(a) FILING OF PREPETITION TAX RETURNS REQUIRED FOR PLAN CONFIRMATION-
Section 1325(a) of title 11, United States Code, as amended by section 212 of
this Act, 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 applicable Federal, State, and local
tax returns as required by section 1309.'.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS-
(1) IN GENERAL- Chapter 13 of title 11, United States Code, as amended
by section 309(c) of this Act, is amended by adding at the end the
following:
`Sec. 1309. Filing of prepetition tax returns
`(a) Not later than the day before the day on which the first meeting of
the creditors is convened under section 341(a), the debtor shall file with
appropriate tax authorities all tax returns for all taxable periods ending
during the 3-year period ending on the date of the filing of the petition.
`(b)(1) Subject to paragraph (2), if the tax returns required by
subsection (a) have not been filed by the date on which the first meeting of
creditors is convened under section 341(a), the trustee may continue that
meeting for a reasonable period of time to allow the debtor an additional
period of time to file any unfiled returns, but such additional period of time
shall not extend beyond--
`(A) for any return that is past due as of the date of the filing of the
petition, the date that is 120 days after the date of that first meeting;
or
`(B) for any return that is not past due as of the date of the filing of
the petition, the later of--
`(i) the date that is 120 days after the date of that first meeting;
or
`(ii) the date on which the return is due under the last automatic
extension of time for filing that return to which the debtor is entitled,
and for which request has been timely made, according to applicable
nonbankruptcy law.
`(2) Upon notice and hearing, and order entered before the tolling of any
applicable filing period determined under this subsection, if the debtor
demonstrates by clear and convincing evidence that the failure to file a
return as required under this subsection is attributable to circumstances
beyond the control of the debtor, the court may extend the filing period
established by the trustee under this subsection for--
`(A) a period of not more than 30 days for returns described in
paragraph (1); and
`(B) a period not to extend after the applicable extended due date for a
return described in paragraph (2).
`(c) For purposes of this section, the term `return' includes a return
prepared pursuant to section 6020 (a) or (b) of the Internal Revenue Code of
1986, or a similar State or local law, or written stipulation to a judgment
entered by a nonbankruptcy tribunal.'.
(2) CONFORMING AMENDMENT- The table of sections for chapter 13 of title
11, United States Code, is amended by inserting after the item relating to
section 1308 the following:
`1309. Filing of prepetition tax returns.'.
(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY- Section 1307 of title
11, United States Code, is amended--
(1) by redesignating subsections (e) and (f) as subsections (f) and (g),
respectively; and
(2) by inserting after subsection (d), the following:
`(e) Upon the failure of the debtor to file a tax return under section
1309, on request of a party in interest or the United States trustee and after
notice and a hearing, the court shall dismiss the case.'.
(d) TIMELY FILED CLAIMS- Section 502(b)(9) of title 11, United States
Code, is amended by inserting before the period at the end the following `,
and except that in a case under chapter 13 of this title, a claim of a
governmental unit for a tax with respect to a return filed under section 1309
shall be timely if the claim is filed on or before the date that is 60 days
after that return was filed in accordance with applicable requirements'.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION- It is the sense of
Congress that the Advisory Committee on Bankruptcy Rules of the Judicial
Conference should, within a reasonable period of time after the date of
enactment of this Act, propose for adoption amended Federal Rules of
Bankruptcy Procedure which provide that--
(1) notwithstanding the provisions of Rule 3015(f), in cases under
chapter 13 of title 11, United States Code, a governmental unit may object
to the confirmation of a plan on or before the date that is 60 days after
the date on which the debtor files all tax returns required under sections
1309 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 with respect to
which a return is required to be filed under section 1309 of title 11,
United States Code, shall be filed until such return has been filed as
required.
SEC. 717. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a)(1) of title 11, United States Code, is amended--
(1) by inserting `including a 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,' after `records';
and
(2) by striking `a hypothetical reasonable investor typical of holders
of claims or interests' and inserting `such a hypothetical investor'.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended by section 402
of this Act, is amended--
(1) in paragraph (25), by striking `or' at the end;
(2) in paragraph (26), by striking the period at the end and inserting
`; or'; and
(3) by inserting after paragraph (26) the following:
`(27) under subsection (a), of the setoff of an income tax refund, by a
governmental unit, with respect to a taxable period that ended before the
order for relief against an income tax liability for a taxable period that
also ended before the order for relief, unless--
`(A) before that setoff, an action to determine the amount or legality
of that tax liability under section 505(a) was commenced; or
`(B) in any case in which 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, in which case the governmental unit may hold the
refund pending the resolution of the action.'.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED STATES CODE.
(a) IN GENERAL- Title 11, United States Code, is amended by inserting
after chapter 13 the following:
`CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES
`Sec.
`1501. Purpose and scope of application.
`SUBCHAPTER I--GENERAL PROVISIONS
`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 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 if--
`(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 of 1970 (84 Stat. 1636 et seq.), 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 under other provisions of this
chapter, the court, upon recognition of a foreign proceeding, may provide
additional assistance to a foreign representative under this title or under
other laws of the United States.
`(b) In determining whether to provide additional assistance under this
title or under other laws of the United States, the court shall consider
whether such additional assistance, consistent with the principles of comity,
will reasonably assure--
`(1) just treatment of all holders of claims against or interests in the
debtor's property;
`(2) protection of claim holders in the United States against prejudice
and inconvenience in the processing of claims in such foreign
proceeding;
`(3) prevention of preferential or fraudulent dispositions of property
of the debtor;
`(4) distribution of proceeds of the debtor's property substantially in
accordance with the order prescribed by this title; and
`(5) if appropriate, the provision of an opportunity for a fresh start
for the individual that such foreign proceeding concerns.
`Sec. 1508. Interpretation
`In interpreting this chapter, the court shall consider its international
origin, and the need to promote an application of this chapter that is
consistent with the application of similar statutes adopted by foreign
jurisdictions.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
`Sec. 1509. Right of direct access
`(a) A foreign representative 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 shall have 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, 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 Federal or State
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 law in effect on the date
of enactment of this chapter as to the priority of claims under section 507 or
726, except that the claim of a foreign creditor under section 507 or 726
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 law in
effect on the date of enactment of this chapter 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
`After the the petition for recognition of the foreign proceeding is
filed, 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) Beginning on the date on which a petition for recognition is filed
and ending on the date on which 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 the actions or proceedings have not been stayed
under section 1520(a);
`(2) staying execution against the debtor's assets to the extent the
execution 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 that 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, if 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), to conditions
that the court considers to be 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 the relief referred to in subsection (b).
`(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) In any case in which 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), 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
`In any case in which a foreign proceeding and a case under another
chapter of this title are taking place concurrently regarding the same debtor,
the court shall seek cooperation and coordination under sections 1525, 1526,
and 1527, and the following shall apply:
`(1) If the case in the United States is taking place at the time the
petition for recognition of the foreign proceeding is filed--
`(A) any relief granted under sections 1519 or 1521 must be consistent
with the relief granted in the case in the United States; and
`(B) even if the foreign proceeding is recognized as a foreign main
proceeding, section 1520 does not apply.
`(2) If a case in the United States under this title commences after
recognition, or after the filing of the petition for recognition, of the
foreign proceeding--
`(A) any relief in effect under sections 1519 or 1521 shall be
reviewed by the court and shall be modified or terminated if inconsistent
with the case in the United States; and
`(B) if the foreign proceeding is a foreign main proceeding, the stay
and suspension referred to in section 1520(a) shall be modified or
terminated if inconsistent with the relief granted in the case in the
United States.
`(3) In granting, extending, or modifying relief granted to a
representative of a foreign nonmain proceeding, the court must be satisfied
that the relief relates to assets that, under the 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. 802. 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 chapter 7, 11, or 12, to debtors
in possession under chapter 11 or 12, and to debtors under chapter 9 who are
authorized to act under section 1505.'.
(b) DEFINITIONS- Paragraphs (23) and (24) of section 101 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'.
SEC. 803. 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.'.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
SEC. 901. 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 striking paragraph (47) and inserting the following:
`(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 section 3 of the Securities Exchange Act of 1934), mortgage
loan, interest in a mortgage related security or mortgage loan,
eligible bankers' acceptance, or qualified foreign government security
(defined for purposes of this paragraph to mean a security that is a
direct obligation of, or that is fully guaranteed by, the central
government of a member of the Organization for Economic Cooperation
and Development); or
`(II) a 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 that is not later than 1 year
after the date of 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); or
`(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;';
(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 striking paragraph (53B) and inserting the following:
`(53B) `swap agreement'--
`(i) 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;
`(ii) an agreement or transaction that is similar to an agreement or
transaction referred to in clause (i) 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;
`(iii) a combination of agreements or transactions referred to in
clauses (i) and (ii);
`(iv) an option to enter into an agreement or transaction referred
to in this subparagraph;
`(v) a master netting agreement that provides for an agreement or
transaction referred to in clause (i), (ii), (iii), or (iv), 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 clause, but only with respect to each
agreement or transaction referred to in any such clause that is under
such master netting agreement; except that
`(B) the definition under subparagraph (A) is applicable for purposes
of this title only, and shall not be construed or applied so as to
challenge or affect the characterization, definition, or treatment of any
swap agreement under any other statute, regulation, or rule, including the
Securities Act of 1933, the Securities Exchange Act of 1934, the Public
Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the Investment Advisers Act of 1940, the
Securities Investor Protection Act of 1970, the Commodity Exchange Act,
and the regulations prescribed by the Securities and Exchange Commission
or the Commodity Futures Trading Commission.';
(2) in section 741, by striking paragraph (7) and inserting the
following:
`(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);
(B) in subparagraph (E), by striking the period at the end and
inserting `; and'; and
(C) 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 striking paragraph (22) and inserting the following:
`(22) `financial institution' means--
`(A)(i) 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
`(ii) if 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, 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) with the debtor or any other entity (other than an affiliate)
of a total gross dollar value of not less than $1,000,000,000 in notional or
actual principal amount outstanding on any day during the previous 15-month
period, or has gross mark-to-market positions of not less than $100,000,000
(aggregated across counterparties) in 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 striking paragraph (26) and inserting the following:
`(26) `forward contract merchant' means a Federal reserve bank, or an
entity, the business of which consists in whole or in part of entering into
forward contracts as or with merchants or in a commodity, as defined or in
section 761, or any similar good, article, service, right, or interest that
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'--
`(A) means an agreement providing for the exercise of rights,
including rights of netting, setoff, liquidation, termination,
acceleration, or closeout, under or in connection with 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; except that
`(B) 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 section 718 of this Act, is amended--
(A) in paragraph (6), by inserting `, pledged to, and under the
control of,' after `held by';
(B) in paragraph (7), by inserting `, pledged to, and under the
control of,' after `held by';
(C) by striking paragraph (17) and inserting the following:
`(17) under subsection (a), of the setoff by a swap participant of a
mutual debt and claim under or in connection with 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 (26), by striking `or' at the end;
(E) in paragraph (27), by striking the period at the end and inserting
`; or'; and
(F) by inserting after paragraph (27) the following:
`(28) 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, as amended
by section 432(2) of this Act, is amended by adding at the end the
following:
`(l) LIMITATION- The exercise of rights not subject to the stay arising
under subsection (a) pursuant to paragraph (6), (7), 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
(104 Stat. 267 et seq.))--
(A) by striking `under a swap agreement'; and
(B) by striking `in connection with a swap agreement' and inserting
`under or in connection with any swap agreement'; and
(2) by inserting before subsection (i) (as redesignated by section 407
of this Act) the following new subsection:
`(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), and 548(b), the
trustee may not avoid a transfer made by or to a master netting agreement
participant under or in connection with any master netting agreement or any
individual contract covered thereby that is made before the commencement of
the case, and except to the extent that the trustee could otherwise avoid such
a transfer made under an individual contract covered by such master netting
agreement (except under section 548(a)(1)(A)).'.
(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 at the end 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 that such master netting agreement participant otherwise did
not take (or is otherwise not deemed to have taken) such transfer for
value.'.
(g) TERMINATION OR ACCELERATION OF SECURITIES CONTRACTS- Section 555 of
title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract';
(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 striking the section heading and inserting the following:
`Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract';
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(i) TERMINATION OR ACCELERATION OF REPURCHASE AGREEMENTS- Section 559 of
title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement';
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF SWAP AGREEMENTS- Section
560 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting following:
`Sec. 560. Contractual right to liquidate, terminate, or accelerate a swap
agreement';
(2) in the first sentence, by striking `termination of a swap agreement'
and inserting `liquidation, termination, or acceleration of 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) 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.
`(b)(1) A party may exercise a contractual right described in subsection
(a) to terminate, liquidate, or accelerate only to the extent that such party
could exercise such a right under section 555, 556, 559, or 560 for each
individual contract covered by the master netting agreement in issue.
`(2) If a debtor is a commodity broker subject to subchapter IV of chapter
7 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 that the party has no
positive net equity in the commodity accounts at the debtor, as calculated
under subchapter IV; and
`(B) another commodity broker may not net or offset an obligation to the
debtor arising under, or in connection with, a commodity contract entered
into or held on behalf of a customer of the debtor against any claim arising
under, or in connection with, other instruments, contracts, or agreements
referred to in subsection (a).
`(c) 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) 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--
`(1) shall not be stayed or otherwise limited by--
`(A) operation of any provision of this title; or
`(B) order of a court in any case under this title;
`(2) shall limit avoidance powers to the same extent as in a proceeding
under chapter 7 or 11; and
`(3) shall not be limited based on the presence or absence of assets of
the debtor in the United States.'.
(m) 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.'.
(n) 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.'.
(o) 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)' 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,'.
(p) 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'.
(q) CONFORMING AMENDMENTS- Title 11 of the United States Code is
amended--
(1) in the table of sections for chapter 5--
(A) by striking the items relating to sections 555 and 556 and
inserting the following:
`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.';
(B) by striking the items relating to sections 559 and 560 and
inserting the following:
`559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement.
`560. Contractual right to liquidate, terminate, or accelerate a swap
agreement.';
(C) by adding after the item relating to section 560 the
following:
`561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts.';
(2) in the table of sections for chapter 7--
(A) by inserting after the item relating to section 766 the
following:
`767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions, securities clearing
agencies, swap participants, repo participants, and master netting agreement
participants.';
(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. 902. DAMAGE MEASURE.
(a) IN GENERAL- 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), forward contract, commodity contract (as defined in section
761) repurchase agreement, or master netting agreement under section 365(a),
or if a forward contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial participant, master
netting agreement participant, or swap participant liquidates, terminates, or
accelerates such contract or agreement, damages shall be measured as of the
earlier of--
`(1) the date of such rejection; or
`(2) the date of such liquidation, termination, or acceleration.';
and
(2) in the table of sections for chapter 5 by inserting after the item
relating to section 561 the following:
`562. Damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase agreements, or
master netting agreements.'.
(b) CLAIMS ARISING FROM REJECTION- Section 502(g) of title 11, United
States Code, is amended--
(1) by inserting `(1)' after `(g)'; and
(2) by adding at the end the following:
`(2) A claim for damages calculated in accordance with section 561 shall
be allowed under subsection (a), (b), or (c) of this section, or disallowed
under subsection (d) or (e) of this section, as if such claim had arisen
before the date of the filing of the petition.'.
SEC. 903. 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 that 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) For purposes of this section, the following definitions shall
apply:
`(1) The term `asset-backed securitization' means a transaction in which
eligible assets transferred to an eligible entity are used as the source of
payment on securities, the most senior of which are rated investment grade
by 1 or more nationally recognized securities rating organizations, issued
by an issuer.
`(2) 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) 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) 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) The term `transferred' means the debtor, under a written agreement,
represented and warranted that eligible assets were sold, contributed, or
otherwise conveyed with the intention of removing them from the estate of
the debtor pursuant to subsection (b)(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. 904. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) EFFECTIVE DATE- This title shall take effect on the date of enactment
of this Act.
(b) APPLICATION OF AMENDMENTS- The amendments made by this title shall
apply with respect to cases commenced or appointments made under any Federal
or State law after the date of enactment of this Act, but shall not apply with
respect to cases commenced or appointments made under any Federal or State law
before the date of enactment of this Act.
TITLE X--PROTECTION OF FAMILY FARMERS
SEC. 1001. REENACTMENT OF CHAPTER 12.
(1) IN GENERAL- Chapter 12 of title 11, United States Code, as reenacted
by section 149 of division C of the Omnibus Consolidated and Emergency
Supplemental Appropriations Act, 1999 (Public Law 105-277), and amended by
this Act, is reenacted.
(2) EFFECTIVE DATE- Subsection (a) shall take effect on April 1,
1999.
(b) CONFORMING AMENDMENT- Section 302 of the Bankruptcy, Judges, United
States Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note)
is amended by striking subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, is amended by adding at
the end the following:
`(4) The dollar amount in section 101(18) shall be adjusted at the same
times and in the same manner as the dollar amounts in paragraph (1) of this
subsection, beginning with the adjustment to be made on April 1, 2001.'.
SEC. 1003. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND SPOUSE RECEIVE
OVER 50 PERCENT OF INCOME FROM FARMING OPERATION IN YEAR PRIOR TO
BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is amended by striking
`the taxable year preceding the taxable year' and inserting `at least 1 of the
3 calendar years preceding the year'.
SEC. 1004. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.
(a) CONTENTS OF PLAN- Section 1222(a)(2) of title 11, United States
Code, is amended to read as follows:
`(2) provide for the full payment, in deferred cash payments, of all
claims entitled to priority under section 507, unless--
`(A) the claim is a claim owed to a governmental unit that arises as a
result of the sale, transfer, exchange, or other disposition of any farm
asset used in the debtor's farming operation, in which case the claim
shall be treated as an unsecured claim that is not entitled to priority
under section 507, but the debt shall be treated in such manner only if
the debtor receives a discharge; or
`(B) the holder of a particular claim agrees to a different treatment
of that claim; and'.
(b) SPECIAL NOTICE PROVISIONS- Section 1231(d) of title 11, United
States Code, is amended by striking `a State or local governmental unit' and
inserting `any governmental unit'.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) HEALTH CARE BUSINESS DEFINED- Section 101 of title 11, United States
Code, as amended by section 1004(a) of this Act, is amended--
(1) by redesignating paragraph (27A) as paragraph (27C); and
(2) inserting after paragraph (27) the following:
`(27A) `health care business'--
`(A) means any public or private entity (without regard to whether
that entity is organized for profit or not for profit) that is primarily
engaged in offering to the general public facilities and services
for--
`(i) the diagnosis or treatment of injury, deformity, or disease;
and
`(ii) surgical, drug treatment, psychiatric or obstetric care;
and
`(I) general or specialized hospital;
`(II) ancillary ambulatory, emergency, or surgical treatment
facility;
`(IV) health maintenance organization;
`(V) home health agency; and
`(VI) other health care institution that is similar to an entity
referred to in subclause (I), (II), (III), (IV), or (V);
and
`(ii) any long-term care facility, including any--
`(I) skilled nursing facility;
`(II) intermediate care facility;
`(III) assisted living facility;
`(V) domicilary care facility; and
`(VI) health care institution that is related to a facility
referred to in subclause (I), (II), (III), (IV), or (V), if that
institution is primarily engaged in offering room, board, laundry, or
personal assistance with activities of daily living and incidentals to
activities of daily living;'.
(b) HEALTH MAINTENANCE ORGANIZATION DEFINED- Section 101 of title 11,
United States Code, as amended by subsection (a), is amended by inserting
after paragraph (27A) the following:
`(27B) `health maintenance organization' means any person that
undertakes to provide or arrange for basic health care services through an
organized system that--
`(A)(i) combines the delivery and financing of health care to
enrollees; and
`(aa) physician services directly through physicians or 1 or more
groups of physicians; and
`(bb) basic health care services directly or under a contractual
arrangement; and
`(II) if reasonable and appropriate, provides physician services and
basic health care services through arrangements other than the
arrangements referred to in clause (i); and
`(B) includes any organization described in subparagraph (A) that
provides, or arranges for, health care services on a prepayment or other
financial basis;'.
(c) PATIENT- Section 101 of title 11, United States Code, as amended by
subsection (b), is amended by inserting after paragraph (40) the following:
`(40A) `patient' means any person who obtains or receives services from
a health care business;'.
(d) PATIENT RECORDS- Section 101 of title 11, United States Code, as
amended by subsection (c), is amended by inserting after paragraph (40A) the
following:
`(40B) `patient records' means any written document relating to a
patient or record recorded in a magnetic, optical, or other form of
electronic medium;'.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) IN GENERAL- Subchapter III of chapter 3 of title 11, United States
Code, is amended by adding at the end the following:
`Sec. 351. Disposal of patient records
`If a health care business commences a case under chapter 7, 9, or 11, and
the trustee does not have a
sufficient amount of funds to pay for the storage of patient records in the
manner required under applicable Federal or State law, the following
requirements shall apply:
`(1) The trustee shall mail, by certified mail, a written request to
each appropriate Federal or State agency to request permission from that
agency to deposit the patient records with that agency.
`(2) If no appropriate Federal or State agency agrees to permit the
deposit of patient records referred to in paragraph (1) by the date that is
60 days after the trustee mails a written request under that paragraph, the
trustee shall--
`(A) publish notice, in 1 or more appropriate newspapers, that if
those patient records are not claimed by the patient or an insurance
provider (if applicable law permits the insurance provider to make that
claim) by the date that is 60 days after the date of that notification,
the trustee will destroy the patient records; and
`(B) during the 60-day period described in subparagraph (A), the
trustee shall attempt to notify directly each patient that is the subject
of the patient records concerning the patient records by mailing to the
last known address of that patient an appropriate notice regarding the
claiming or disposing of patient records.
`(3) If, after providing the notification under paragraph (2), patient
records are not claimed during the 60-day period described in paragraph
(2)(A) or in any case in which a notice is mailed under paragraph (2)(B),
during the 90-day period beginning on the date on which the notice is
mailed, by a patient or insurance provider in accordance with that
paragraph, the trustee shall destroy those records by--
`(A) if the records are written, shredding or burning the records;
or
`(B) if the records are magnetic, optical, or other electronic
records, by otherwise destroying those records so that those records
cannot be retrieved.'.
(b) CLERICAL AMENDMENT- The chapter analysis for chapter 3 of title 11,
United States Code, is amended by inserting after the item relating to section
350 the following:
`351. Disposal of patient records.'.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING A HEALTH CARE
BUSINESS.
Section 503(b) of title 11, United States Code, is amended--
(1) in paragraph (5), by striking `and' at the end;
(2) in paragraph (6), by striking the period at the end and inserting `;
and'; and
(3) by adding at the end the following:
`(7) the actual, necessary costs and expenses of closing a health care
business incurred by a trustee, including any cost or expense
incurred--
`(A) in disposing of patient records in accordance with section 351;
or
`(B) in connection with transferring patients from the health care
business that is in the process of being closed to another health care
business.'.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT ADVOCATE.
(1) APPOINTMENT OF OMBUDSMAN- Subchapter II of chapter 3 of title 11,
United States Code, is amended by inserting after section 331 the
following:
`Sec. 332. Appointment of ombudsman
`(a) Not later than 30 days after a case is commenced by a health care
business under chapter 7, 9, or 11, the court shall appoint an ombudsman to
represent the interests of the patients of the health care business.
`(b) An ombudsman appointed under subsection (a) shall--
`(1) monitor the quality of patient care, to the extent necessary under
the circumstances, including reviewing records and interviewing patients and
physicians;
`(2) not later than 60 days after the date of appointment, and not less
frequently than every 60 days thereafter, report to the court, at a hearing
or in writing, regarding the quality of patient care at the health care
business involved; and
`(3) if the ombudsman determines that the quality of patient care is
declining significantly or is otherwise being materially compromised, notify
the court by motion or written report, with notice to appropriate parties in
interest, immediately upon making that determination.
`(c) An ombudsman shall maintain any information obtained by the ombudsman
under this section that relates to patients (including information relating to
patient records) as confidential information.'.
(2) CLERICAL AMENDMENT- The chapter analysis for chapter 3 of title 11,
United States Code, is amended by inserting after the item relating to
section 331 the following:
`332. Appointment of ombudsman.'.
(b) COMPENSATION OF OMBUDSMAN- Section 330(a)(1) of title 11, United
States Code, is amended--
(1) in the matter proceeding subparagraph (A), by inserting `an
ombudsman appointed under section 331, or' before `a professional person';
and
(2) in subparagraph (A), by inserting `ombudsman,' before `professional
person'.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER PATIENTS.
(a) IN GENERAL- Section 704(a) of title 11, United States Code, as amended
by section 219 of this Act, is amended--
(1) in paragraph (9), by striking `and' at the end;
(2) in paragraph (10), by striking the period and inserting `; and';
and
(3) by adding at the end the following:
`(11) use all reasonable and best efforts to transfer patients from a
health care business that is in the process of being closed to an
appropriate health care business that--
`(A) is in the vicinity of the health care business that is
closing;
`(B) provides the patient with services that are substantially similar
to those provided by the health care business that is in the process of
being closed; and
`(C) maintains a reasonable quality of care.'.
(b) CONFORMING AMENDMENT- Section 1106(a)(1) of title 11, United States
Code, is amended by striking `and 704(9)' and inserting `704(9), and
704(10)'.
TITLE XII--TECHNICAL AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by section 1101 of
this Act, 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 striking paragraph (54) and inserting the following:
`(54) The term `transfer' means--
`(A) the creation of a lien;
`(B) the retention of title as a security interest;
`(C) the foreclosure of a debtor's equity of redemption; or
`(D) each mode, direct or indirect, absolute or conditional, voluntary
or involuntary, of disposing of or parting with--
`(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. 1202. 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. 1203. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is amended by striking
`922' and all that follows through `or', and inserting `922, 1201, or'.
SEC. 1204. TECHNICAL AMENDMENTS.
Title 11 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. 1205. 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. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.
Section 328(a) of title 11, United States Code, is amended by inserting
`on a fixed or percentage fee basis,' after `hourly basis,'.
SEC. 1207. 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. 1208. 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. 1209. 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. 1210. PRIORITIES.
Section 507(a) of title 11, United States Code, as amended by sections 211
and 229 of this Act, is amended--
(1) in paragraph (4)(B), by striking the semicolon at the end and
inserting a period; and
(2) in paragraph (8), by inserting `unsecured' after `allowed'.
SEC. 1211. EXEMPTIONS.
Section 522(g)(2) of title 11, United States Code, as amended by section
311 of this Act, is amended by striking `subsection (f)(2)' and inserting
`subsection (f)(1)(B)'.
SEC. 1212. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by section 229 of
this Act, is amended--
(1) 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);
(A) in paragraph (3), by striking `or (6)' each place it appears and
inserting `(6), or (15)';
(B) in paragraph (9), by striking `motor vehicle or vessel' and
inserting `motor vehicle, vessel, or aircraft'; and
(C) in paragraph (15), as so redesignated by paragraph (1) of this
subsection, by inserting `to a spouse, former spouse, or child of the
debtor and' after `(15)'; and
(3) in subsection (e), by striking `a insured' and inserting `an
insured'.
SEC. 1213. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is amended by striking
`section 523' and all that follows through `or that' and inserting `section
523, 1228(a)(1), or 1328(a)(1), or that'.
SEC. 1214. 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. 1215. 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. 1216. PREFERENCES.
(a) IN GENERAL- Section 547 of title 11, United States Code, is
amended--
(1) in subsection (b), by striking `subsection (c)' and inserting
`subsections (c) and (i)'; and
(2) by adding at the end the following:
`(i) If the trustee avoids under subsection (b) a 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.'.
(b) APPLICABILITY- The amendments made by this section shall apply to any
case that pending or commenced on or after the date of enactment of this
Act.
SEC. 1217. 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. 1218. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by striking
`1009,'.
SEC. 1219. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, as amended by section
901(k) of this Act, is amended by inserting `1123(d),' after `1123(b),'.
SEC. 1220. 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. 1221. 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. 1222. 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. 1223. 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. 1224. 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. 1225. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.
(a) SALE OF PROPERTY OF ESTATE- Section 363(d) of title 11, United States
Code, is amended by striking `only' and all that follows through the end of
the subsection and inserting `only--
`(1) in accordance with applicable nonbankruptcy law that governs the
transfer of property by a corporation or trust that is not a moneyed,
business, or commercial corporation or trust; and
`(2) to the extent not inconsistent with any relief granted under
subsection (c), (d), (e), or (f) of section 362.'.
(b) CONFIRMATION OF PLAN FOR REORGANIZATION- Section 1129(a) of title 11,
United States Code, as amended by section 212 of this Act, 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:
`(f) Notwithstanding any other provision of this title, property that is
held by a debtor that is a corporation described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such
Code may be transferred to an entity that is not such a corporation, but only
under the same conditions as would apply if the debtor had not filed a case
under this title.'.
(d) APPLICABILITY- The amendments made by this section shall apply to a
case pending under title 11, United States Code, on the date of enactment of
this Act, 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 construed 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. 1226. 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. 1227. 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'.
SEC. 1228. 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 positions.
(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:
`(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).'.
TITLE XIII--GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
SEC. 1301. 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
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, United States Code,
before the effective date of this Act.
END