[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1914 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 1914

To amend title 11, United States Code, provide for business bankruptcy 
                    reform, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 2, 1998

 Mr. Grassley 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, provide for business bankruptcy 
                    reform, 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 ``Business 
Bankruptcy Reform Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
               TITLE I--HEALTH CARE AND EMPLOYEE BENEFITS

Sec. 101. Definitions.
Sec. 102. Disposal of patient records.
Sec. 103. Administrative expense claim for costs of closing a health 
                            care business.
Sec. 104. Appointment of ombudsman to act as patient advocate.
Sec. 105. Debtor in possession; duty of trustee to transfer patients.
Sec. 106. Clarification of treatment of pension plan contribution 
                            during pendency of a case.
Sec. 107. Pension plan contribution requirement.
Sec. 108. Exclusion of payroll deductions.
                    TITLE II--FINANCIAL INSTRUMENTS

Sec. 201. Definitions of certain contracts and agreements.
Sec. 202. Definitions of financial institution and forward contract 
                            merchant.
Sec. 203. Master netting agreement and master netting agreement 
                            participant defined.
Sec. 204. Swap agreements, securities contracts, commodity contracts, 
                            forward contracts, repurchase agreements 
                            and master netting agreements under an 
                            automatic stay.
Sec. 205. Limitation of avoidance powers under master netting 
                            agreement.
Sec. 206. Fraudulent transfers of master netting agreements.
Sec. 207. Liquidation, termination, or acceleration of certain 
                            instruments.
Sec. 208. Municipal bankruptcies.
Sec. 209. Securities contracts, commodity contracts, and forward 
                            contracts.
Sec. 210. Ancillary proceedings.
Sec. 211. Liquidations.
Sec. 212. Setoff.
Sec. 213. Recordkeeping requirements.
Sec. 214. Damage measure.
Sec. 215. Asset-backed securitizations.
Sec. 216. Applicability.
           TITLE III--ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 301. Amendment to add a chapter 6 to title 11, United States Code.
Sec. 302. Amendments to other chapters in title 11, United States Code.
                  TITLE IV--SMALL BUSINESS BANKRUPTCY

Sec. 401. Small business defined.
Sec. 402. Flexible rules for disclosure statement and plan.
Sec. 403. Standard form disclosure statements and plans.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee and bankruptcy 
                            administrator.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment 
                            of trustee.
Sec. 414. Single asset real estate defined.
Sec. 415. Plan confirmation.
Sec. 416. Payment of interest.
                     TITLE V--BANKRUPTCY TAX ISSUES

Sec. 501. Effective notice to government.
Sec. 502. Notice of request for a determination of taxes.
Sec. 503. Rate of interest on tax claims.
Sec. 504. Tolling of priority of tax claim time periods.
Sec. 505. Assessment defined.
Sec. 506. Chapter 11 discharge of fraudulent taxes.
Sec. 507. The stay of proceedings in tax court.
Sec. 508. Periodic payment of taxes in chapter 11 cases.
Sec. 509. The avoidance of statutory tax liens prohibited.
Sec. 510. Course of business payment of taxes.
Sec. 511. Tardily filed priority tax claims.
Sec. 512. Income tax returns prepared by tax authorities.
Sec. 513. The discharge of the estate's liability for unpaid taxes.
Sec. 514. Standards for tax disclosure.
Sec. 515. Setoff of tax refunds.
                        TITLE VI--MISCELLANEOUS

Sec. 601. Executory contracts and unexpired leases.
Sec. 602. Allowance of claims or interests.
Sec. 603. Expedited appeals of bankruptcy cases to courts of appeals.
Sec. 604. Creditors and equity security holders committees.
Sec. 605. Repeal of sunset provision.
Sec. 606. Cases ancillary to foreign proceedings.

               TITLE I--HEALTH CARE AND EMPLOYEE BENEFITS

SEC. 101. DEFINITIONS.

    (a) Health Care Business Defined.--Section 101 of title 11, United 
States Code, is amended by inserting after paragraph (27) the 
following:
            ``(27A) `health care business'--
                    ``(A) means any public or private entity (without 
                regard to whether that entity is organized for profit 
                or not for profit) that is primarily engaged in 
                offering to the general public facilities and services 
                for--
                            ``(i) the diagnosis or treatment of injury, 
                        deformity, or disease;
                            ``(ii) surgical, drug treatment, 
                        psychiatric or obstetric care; and
                    ``(B) includes--
                            ``(i) any--
                                    ``(I) general or specialized 
                                hospital;
                                    ``(II) ancillary ambulatory, 
                                emergency, or surgical treatment 
                                facility;
                                    ``(III) hospice;
                                    ``(IV) 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;
                                    ``(IV) home for the aged;
                                    ``(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--
                    ``(A) that--
                            ``(i) combines the delivery and financing 
                        of health care to enrollees; and
                            ``(ii)(I) provides--
                                    ``(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. 102. 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. 103. 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. 104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT ADVOCATE.

    (a) In General.--
            (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) report to the court, at a hearing or in writing, not 
        later than 60 days after the date of appointment, and not less 
        frequently than every 60 days thereafter, 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. 105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER PATIENTS.

    (a) In General.--Section 704 of title 11, United States Code, is 
amended--
            (1) in paragraph (8), by striking ``and'' at the end;
            (2) in paragraph (9), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(10) 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)''.

SEC. 106. CLARIFICATION OF TREATMENT OF PENSION PLAN CONTRIBUTION 
              DURING PENDENCY OF A CASE.

    (a) Treatment of Pension Benefits as Administrative Expenses.--
Section 503(b) of title 11, United States Code, as amended by section 
103, 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) minimum funding contributions for which the debtor is 
        liable that--
                    ``(A) are made to an employee pension benefit plan 
                that is subject to the minimum funding requirements 
                under--
                            ``(i) section 412 of the Internal Revenue 
                        Code of 1986; or
                            ``(ii) section 302 of the Employee 
                        Retirement Income Security Act of 1974 (29 
                        U.S.C. 1082); and
                    ``(B) become due on or after the date of filing of 
                the petition commencing the case.''.
    (b) Timely Payment Required in Certain Circumstances.--Section 
503(b) of title 11, United States Code is amended by adding at the end 
the following flush sentence:
``If, as of a due date referred to in paragraph (8)(B), a pension plan 
is required to make a contribution under section 412(m)(5) of the 
Internal Revenue Code of 1986 or section 302(e)(6) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1082(e)(6)), the 
trustee shall make that contribution under that section by the 
applicable date specified in that section.''.
    (c) Applicability.--The amendment made by subsection (b) shall 
apply to contributions made on or after the date of enactment of this 
Act.

SEC. 107. PENSION PLAN CONTRIBUTION REQUIREMENT.

    (a) Funding Required if Plan Is Not Terminated.--Subchapter IV of 
chapter 3 of title 11, United States Code, is amended by adding at the 
end the following:
``Sec. 367. Continuance of certain pension plans
    ``Notwithstanding sections 502(b)(2) and 503, in any case under 
this title in which the debtor is the sponsor of a pension plan covered 
under section 4021 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1321), if the trustee does not terminate that pension 
plan in accordance with section 4041 of such Act (29 U.S.C. 1341) 
during the 180-day period beginning on the date of issuance of an order 
for relief, the trustee shall--
            ``(1) pay any amount of contributions, including any 
        interest due on that amount, that--
                    ``(A) is outstanding at the end of that 180-day 
                period; and
                    ``(B) is required to be paid under that Act; and
            ``(2) unless the pension plan is terminated in accordance 
        with the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1001 et seq.) after the end of that 180-day period--
                    ``(A) pay any contributions that are required to be 
                paid after that date as those contributions become due; 
                or
                    ``(B) provide to the court adequate assurances that 
                the contributions referred to in subparagraph (A) will 
                be paid.''.
    (b) Applicability.--This section applies to cases that are pending 
or commenced on or after the date of enactment of this Act.
    (c) Clerical Amendment.--The chapter analysis for chapter 3 of 
title 11, United States Code, is amended by inserting after the item 
relating to section 366 the following:

``367. Continuance of certain pension plans.''.

SEC. 108. EXCLUSION OF PAYROLL DEDUCTIONS.

    Section 541(b) of title 11, United States Code, is amended--
            (1) in paragraph (4), by striking ``or'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(6) any funds deducted from paid wages, if those 
        deductions--
                    ``(A) were made during the 180-day period 
                immediately preceding the commencement of a case under 
                this title;
                    ``(B) are held by an employer who is the debtor in 
                the case referred to in subparagraph (A); and
                    ``(C) were made for funds that are owed to any 
                entity other than to the United States.''.

                    TITLE II--FINANCIAL INSTRUMENTS

SEC. 201. DEFINITIONS OF CERTAIN CONTRACTS AND AGREEMENTS.

    (a) Forward Contracts; Repurchase Agreements; Swap Agreements.--
            (1) Amendments to title 11.--Section 101 of title 11, 
        United States Code, is amended--
                    (A) in paragraph (25)--
                            (i) by striking ``means a contract'' and 
                        inserting the following: ``means--
                    ``(A) a contract''; and
                            (ii) by striking ``, or any combination 
                        thereof or option thereon;'' and inserting the 
                        following: ``, or any other similar agreement;
                    ``(B) any combination of agreements or transactions 
                referred to in subparagraph (A);
                    ``(C) any option to enter into any agreement or 
                transaction referred to in subparagraph (A);
                    ``(D) a master agreement that provides for an 
                agreement or transaction referred to in subparagraph 
                (A), together with supplements thereto, without regard 
                to whether the master agreement provides for an 
                agreement or transaction that is not a forward contract 
                under this paragraph, except that the master agreement 
                shall be considered to be a forward contract under this 
                paragraph only with respect to each agreement or 
                transaction under the master agreement that is referred 
                to subparagraph (A); and
                    ``(E) a security agreement or arrangement or other 
                credit enhancement related to any contract referred to 
                in subparagraph (A);'';
                    (B) by striking paragraph (47) and inserting the 
                following:
            ``(47) `repurchase agreement'--
                    ``(A) means--
                            ``(i) an agreement, including related 
                        terms, that provides for the transfer of 1 or 
                        more certificates of deposit, eligible bankers' 
                        acceptances, or securities, against the 
                        transfer of funds by the transferee of the 
                        certificates of deposit, acceptances, or 
                        securities, with a simultaneous agreement by 
                        such transferee to transfer to the transferor 
                        thereof certificates, acceptances, or 
                        securities as described in this subparagraph, 
                        at a date certain or on demand, against the 
                        transfer of funds, and any other similar 
                        agreement;
                            ``(ii) a master agreement that provides for 
                        an agreement or transaction referred to in 
                        clause (i), together with all supplements, 
                        without regard to whether the master agreement 
                        provides for an agreement or transaction that 
                        is not a repurchase agreement under this 
                        subparagraph, except that the master agreement 
                        shall be considered to be a repurchase 
                        agreement under this subparagraph only with 
                        respect to each agreement or transaction under 
                        the master agreement that is referred to in 
                        clause (i);
                            ``(iii) any combination of agreements or 
                        transactions referred to in clause (i);
                            ``(iv) any option to enter into any 
                        agreement or transaction referred to in clause 
                        (i); or
                            ``(v) a security agreement or arrangement 
                        or other credit enhancement related to any 
                        agreement or transaction referred to in clause 
                        (i); and
                    ``(B) includes a reverse repurchase agreement.''; 
                and
                    (C) by striking paragraph (53B) and inserting the 
                following:
            ``(53B) `swap agreement' means--
                    ``(A) any agreement, including the terms and 
                conditions incorporated by reference in any 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, or basis swap;
                            ``(ii) a spot, same day-tomorrow, tomorrow-
                        next, forward or other foreign exchange 
                        agreement;
                            ``(iii) a currency swap, option, future, or 
                        forward agreement;
                            ``(iv) an equity index or equity swap, 
                        option, future, or forward agreement;
                            ``(v) a debt index or debt swap, option, 
                        future, or forward agreement;
                            ``(vi) a credit spread or credit swap, 
                        option, future, or forward agreement;
                            ``(vii) a commodity index or commodity 
                        swap, option, future, or forward agreement;
                            ``(viii) similar to any other agreement 
                        referred to in this subparagraph that is 
                        presently or in the future becomes regularly 
                        entered into in the swap agreement market 
                        (including terms and conditions incorporated by 
                        reference therein) and that is a forward, swap, 
                        future, or option on 1 or more rates, 
                        currencies, commodities, equity securities or 
                        other equity instruments, debt securities or 
                        other debt instruments, or economic indices or 
                        measures of economic risk or value;
                            ``(ix) a master agreement that provides for 
                        an agreement or transaction referred to in 
                        clause (i), (ii), (iii), (iv), (v), (vi), 
                        (vii), or (viii), together with all supplements 
                        thereto, without regard to whether the master 
                        agreement contains an agreement or transaction 
                        that is described in any of those clauses, 
                        except that the master agreement shall be 
                        considered to be a swap agreement only with 
                        respect to each agreement or transaction under 
                        the master agreement that is referred to in 
                        clause (i), (ii), (iii), (iv), (vi), (vii), or 
                        (viii); or
                            ``(x) any combination of agreements 
                        referred to in this subparagraph;
                    ``(B) any option to enter into any agreement 
                referred to in subparagraph (A); and
                    ``(C) any security agreement or arrangement or 
                other credit enhancement related to any agreements or 
                transactions referred to in subparagraph (A);''.
            (2) Rule of construction.--Nothing in paragraph (53B) of 
        section 101 of title 11, United States Code, as amended by this 
        section, shall be construed or applied to challenge or affect 
        the characterization, definition, or treatment of any swap 
        agreement or any instrument defined as a swap agreement in that 
        paragraph under any other provision of law, except as expressly 
        provided in that other provision of law, including--
                    (A) the Securities Act of 1933 (15 U.S.C. 77a et 
                seq.);
                    (B) the Securities Exchange Act of 1934 (15 U.S.C. 
                78a et seq.);
                    (C) the Public Utility Holding Company Act of 1935 
                (15 U.S.C. 79a et seq.);
                    (D) the Trust Indenture Act of 1939 (15 U.S.C. 
                77aaa et seq.);
                    (E) the Investment Company Act of 1940 (15 U.S.C. 
                80a-1 et seq.);
                    (F) the Investment Advisers Act of 1940 (15 U.S.C. 
                80b et seq.);
                    (G) the Securities Investor Protection Act of 1970 
                (15 U.S.C. 78aaa et seq.);
                    (H) the Commodity Exchange Act (7 U.S.C. 1 et 
                seq.); and
                    (I) any rule or regulation promulgated by the 
                Securities and Exchange Commission or the Commodities 
                Futures Trading Commission.
    (b) Securities Contracts.--Section 741(7) of title 11, United 
States Code, is amended to read as follows:
            ``(7) `securities contract' means--
                    ``(A) a contract for the purchase, sale, or loan of 
                a security, including an option for the purchase or 
                sale of a security, certificate of deposit, or group or 
                index of securities (including any interest therein or 
                based on the value thereof);
                    ``(B) any option entered into on a national 
                securities exchange relating to foreign currencies;
                    ``(C) the guarantee of any settlement of cash or 
                securities by or to a securities clearing agency;
                    ``(D) any margin loan;
                    ``(E) any other agreement or transaction that is 
                similar to any instrument referred to in this 
                paragraph;
                    ``(F) a master agreement that provides for an 
                agreement or transaction referred to in subparagraph 
                (A), (B), (C), (D), or (E), together with supplements 
                thereto, without regard to whether the master agreement 
                provides for an agreement or transaction that is not a 
                securities contract under this paragraph, except that 
                the master agreement shall be considered to be a 
                securities contract under this paragraph only with 
                respect to each agreement or transaction under the 
                master agreement that is referred to in subparagraph 
                (A), (B), (C), (D), or (E);
                    ``(G) any combination of the agreements or 
                transactions referred to in this paragraph; or
                    ``(H) any option to enter into any agreement or 
                transaction referred to in this paragraph;''.
    (c) Commodity Contracts.--Section 761(4) of title 11, United States 
Code, is amended--
            (1) in subparagraph (D), by striking ``or'' at the end; and
            (2) by adding at the end the following:
                    ``(F) any other agreement or transaction that is 
                similar to any instrument referred to in this 
                paragraph;
                    ``(G) a master agreement that provides for an 
                agreement or transaction referred to in subparagraph 
                (A), (B), (C), (D), (E), or (F), together with 
                supplements thereto, without regard to whether the 
                master agreement provides for an agreement or 
                transaction that is not a commodity contract under this 
                paragraph, except that the master agreement shall be 
                considered to be a commodity contract under this 
                paragraph only with respect to each agreement or 
                transaction under the master agreement that is referred 
                to in subparagraph (A), (B), (C), (D), (E), or (F);
                    ``(H) any combination of the agreements or 
                transactions referred to in this paragraph;
                    ``(I) any option to enter into any agreement or 
                transaction referred to in this paragraph; or
                    ``(J) a security agreement or arrangement or other 
                credit enhancement related to 1 or more instruments 
                referred to in this paragraph;''.

SEC. 202. DEFINITIONS OF FINANCIAL INSTITUTION AND FORWARD CONTRACT 
              MERCHANT.

    (a) Financial Institution Defined.--Section 101(22) of title 11, 
United States Code, is amended to read as follows:
            ``(22) `financial institution'--
                    ``(A) means--
                            ``(i) a depository institution, as that 
                        term is defined in section 3 of the Federal 
                        Deposit Insurance Act; and
                            ``(ii) a credit union, as defined in 
                        section 101 of the Federal Credit Union Act; 
                        and
                    ``(B) includes--
                            ``(i) a Federal Reserve bank;
                            ``(ii) a trust company;
                            ``(iii) a savings bank and a savings 
                        association, as those terms are defined in 
                        section 3 of the Federal Deposit Insurance Act;
                            ``(iv) a receiver or conservator for any 
                        institution referred to in this paragraph; and
                            ``(v) a customer of any institution 
                        referred to in this paragraph in any case in 
                        which such institution acts as agent or 
                        custodian for that customer in connection with 
                        a securities contract, as defined in section 
                        741(7);''.
    (b) Financial Participant Defined.--Section 101 of title 11, United 
States Code, is amended by inserting after paragraph (22) the following 
new paragraph:
            ``(22A) `financial participant' means--
                    ``(A) any commodity broker, forward contract 
                merchant, stockbroker, financial institution, or 
                securities clearing agency; or
                    ``(B) any entity that, at any time before the 
                filing of the petition, has an outstanding commodity 
                contract, forward contract, or securities contract with 
                the debtor.''.
    (c) Forward Contract Merchant Defined.--Section 101(26) of title 
11, United States Code, is amended to read as follows:
            ``(26) `forward contract merchant' means a Federal Reserve 
        bank, or a person whose business consists in whole or in part 
        of entering into forward contracts, as or with merchants, in a 
        commodity (as that term is defined in section 761(8)), or any 
        similar good, article, service, right, or interest that is or 
        becomes the subject of dealing in the forward contract 
        trade;''.

SEC. 203. MASTER NETTING AGREEMENT AND MASTER NETTING AGREEMENT 
              PARTICIPANT DEFINED.

    Section 101 of title 11, United States Code, is amended by 
inserting after paragraph (38) the following new paragraphs:
            ``(38A) `master netting agreement' means--
                    ``(A) 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 
                described in section 561(a)(2); and
                    ``(B) any security agreement or arrangement or 
                other credit enhancement related to any of the 
                agreements referred to in subparagraph (A);
            ``(38B) `master netting agreement participant' means an 
        entity that, at any time before the filing, of a petition, is a 
        party to an outstanding master netting agreement with the 
        debtor;''.

SEC. 204. SWAP AGREEMENTS, SECURITIES CONTRACTS, COMMODITY CONTRACTS, 
              FORWARD CONTRACTS, REPURCHASE AGREEMENTS AND MASTER 
              NETTING AGREEMENTS UNDER AN AUTOMATIC STAY.

    (a) In General.--Section 362(b) of title 11, United States Code, is 
amended--
            (1) in paragraph (6), by inserting ``, pledged to, and 
        under the control of such entity,'' after ``held by'';
            (2) in paragraph (7), by inserting ``, pledged to, and 
        under the control of such repo participant,'' after ``held 
        by'';
            (3) by striking paragraph (17) and inserting the following:
            ``(17) under subsection (a), of the setoff by a swap 
        participant of any mutual debt and claim under or in connection 
        with 1 or more swap agreements that constitutes the setoff of a 
        claim against the debtor for any payment or other transfer of 
        property due from the debtor under or in connection with such 
        swap agreements against--
                    ``(A) any payment due to the debtor from the swap 
                participant under or in connection with such swap 
                agreements; or
                    ``(B) cash, securities, or other property--
                            ``(i) held by, pledged to, and under the 
                        control of that swap participant; and
                            ``(ii) due from that swap participant to 
                        margin, guarantee, secure, or settle such swap 
                        agreement;'';
            (4) in paragraph (18), by striking the period at the end 
        and inserting ``; or''; and
            (5) by adding at the end the following:
            ``(19) 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 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 against--
                    ``(A) any payment due to the debtor from such 
                participant under or in connection with such agreements 
                or any contract or agreement subject to such 
                agreements; or
                    ``(B) cash, securities, or other property held by, 
                pledged to and under the control of, or due from such 
                participant to margin, guarantee, secure, or settle 
                such agreements or any contract or agreement subject to 
                such agreements.''.
    (b) Limitation.--Section 362 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(i) The exercise of rights not subject to the stay arising under 
subsection (a) pursuant to paragraph (6), (7), (17), or (19) of 
subsection (b) 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.''.

SEC. 205. LIMITATION OF AVOIDANCE POWERS UNDER MASTER NETTING 
              AGREEMENT.

    Section 546 of title 11, United States Code, is amended--
            (1) in the first subsection designated as subsection (g) 
        (as added by section 103 of the Act entitled ``An Act to amend 
        title 11 of the United States Code regarding swap agreements 
        and forward contracts'', approved June 25, 1990 (Public Law 
        101-311; 104 Stat. 268))--
                    (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'';
            (2) by adding at the end the following:
    ``(h) Notwithstanding sections 544, 545, 547, 548(a)(2), and 
548(b), a trustee may not avoid a transfer made by or to a master 
netting agreement participant under or in connection with any master 
netting agreement that is made before the commencement of the case, 
except under section 548(a)(1).''; and
            (3) by redesignating the second subsection designated as 
        subsection (g) (as added by section 222(a) of the Bankruptcy 
        Reform Act of 1994 (108 Stat. 4129)) as subsection (i) and 
        inserting that subsection after subsection (h), as added by 
        this section.

SEC. 206. FRAUDULENT TRANSFERS OF MASTER NETTING AGREEMENTS.

    Section 548(d)(2) of title 11, United States Code, is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(E) a master netting agreement participant that 
                receives a transfer in connection with a master netting 
                agreement takes for value to the extent of that 
                transfer.''.

SEC. 207. LIQUIDATION, TERMINATION, OR ACCELERATION OF CERTAIN 
              INSTRUMENTS.

    (a) 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'';
        and
            (2) in the first sentence, by inserting ``, termination, or 
        acceleration'' after ``liquidation''.
    (b) Commodities or Forward Contracts.--Section 556 of title 11, 
United States Code, is amended--
            (1) by striking the section heading and insert the 
        following:
``Sec. 556. Contractual right to liquidate, terminate, or accelerate a 
              commodities contract or forward contract'';
        and
            (2) in the first sentence, by inserting ``, termination, or 
        acceleration'' after ``liquidation''.
    (c) 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'';
        and
            (2) in the first sentence, by inserting ``, termination, or 
        acceleration'' after ``liquidation''.
    (d) Swap Agreements.--Section 560 of title 11, United States Code, 
is amended--
            (1) by striking the section heading and inserting the 
        following:
``Sec. 560. Contractual right to liquidate, terminate, or accelerate a 
              swap agreement'';
        and
            (2) in the first sentence--
                    (A) by striking ``termination of a swap agreement'' 
                and inserting ``liquidation, termination, or 
                acceleration of 1 or more swap agreements''; and
                    (B) by striking ``in connection with any swap 
                agreement'' and inserting ``in connection with 1 or 
                more swap agreements''.
    (e) Master Netting Agreements.--Subchapter III of chapter 5 of 
title 11, United States Code, is amended by adding at the end the 
following:
``Sec. 561. Contractual right to terminate, liquidate, accelerate, or 
              offset under a master netting agreement and across 
              contracts
    ``(a) Prohibition on Stay, Avoidance, or Other Limitation.--
            ``(1) In general.--Subject to subsection (b), the exercise 
        of any contractual right, because of a condition of the kind 
        specified in section 365(e)(1), to cause the termination, 
        liquidation, or acceleration of, or to offset or net 
        termination values, payment amounts, or other transfer 
        obligations arising under or in connection with 1 or more 
        contracts or agreements described in paragraph (2) shall not be 
        stayed, avoided, or otherwise limited--
                    ``(A) by operation of any provision of this title; 
                or
                    ``(B) by any order of a court or administrative 
                agency in any proceeding under this title.
            ``(2) Definition.--A contract or agreement described in 
        this paragraph is--
                    ``(A) a securities contract, as defined in section 
                741(7);
                    ``(B) a commodity contract, as defined in section 
                761(4);
                    ``(C) a forward contract;
                    ``(D) a repurchase agreement;
                    ``(E) a swap agreement; or
                    ``(F) a master netting agreement.
    ``(b) Limitations.--A party may exercise a contractual right 
described in subsection (a) to terminate, liquidate, or accelerate only 
to the extent that the 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, notwithstanding whether or not each 
individual contract contains such contractual rights.
    ``(c) Definition.--In this section, the term `contractual right' 
includes--
            ``(1) a right set forth in a rule or bylaw of a national 
        securities exchange, a national securities association or a 
        securities clearing agency;
            ``(2) a right set forth in a bylaw of a clearing 
        organization or contract market or in a resolution of the 
        governing board thereof; and
            ``(3) a right, without regard to whether that right is 
        evidenced in writing, arising--
                    ``(A) under common law;
                    ``(B) under law merchant; or
                    ``(C) by reason of normal business practice.''.
    (f) Clerical Amendments.--The chapter analysis for chapter 5 of 
title 11, United States Code, is amended--
            (1) 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.'';
        and
            (2) 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.
``561. Contractual right to terminate, liquidate, accelerate, or offset 
                            under a master netting agreement and across 
                            contracts.''.

SEC. 208. MUNICIPAL BANKRUPTCIES.

    Section 901(a) of title 11, United States Code, is amended by 
striking ``557'' and inserting ``555, 556, 557, 559, 560, 561, 562''.

SEC. 209. SECURITIES CONTRACTS, COMMODITY CONTRACTS, AND FORWARD 
              CONTRACTS.

    Title 11, United States Code, is amended--
            (1) in section 362(b)(6), by striking ``commodity broker, 
        forward contract merchant, stockbroker, financial institutions, 
        or securities clearing agency'' each place it appears and 
        inserting ``financial participant'';
            (2) in section 546(e), by striking ``commodity broker, 
        forward contract merchant, stockbroker, financial institution, 
        or securities clearing agency'' and inserting ``financial 
        participant'';
            (3) in section 548(d)(2)(B), by striking ``commodity 
        broker, forward contract merchant, stockbroker, financial 
        institution, or securities clearing agency'' and inserting 
        ``financial participant'';
            (4) in section 555--
                    (A) by striking ``stockbroker, financial 
                institution, or securities clearing agency'' and 
                inserting ``financial participant''; 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 striking ``commodity broker or 
        forward contract merchant'' and inserting ``financial 
        participant''.

SEC. 210. ANCILLARY PROCEEDINGS.

    Section 304 of title 11, United States Code, is amended by adding 
at the end the following:
    ``(d) Any provision 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 so that 
enforcement of contractual provisions of such contracts and agreements 
in accordance with their terms will not be stayed or otherwise limited 
by operation of any provision of this title or by order of a court in 
any proceeding under this title, and to limit avoidance powers to the 
same extent as a proceeding under chapter 7 or 11 of this title (such 
enforcement not to be limited based on the presence or absence of 
assets of the debtor in the United States).''.

SEC. 211. LIQUIDATIONS.

    (a) Commodity Brokers.--Subchapter IV of chapter 7 of title 11, 
United States Code, is amended by adding at the end the following:
``Sec. 767. Commodity broker liquidation and forward contract 
              merchants, commodity brokers, stockbrokers, financial 
              institutions, securities clearing agencies, swap 
              participants, financial 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, financial participant, repo participant, or master netting 
agreement participant under this title shall not affect--
            ``(1) the priority of any unsecured claim that such person 
        may have after the exercise of those rights; or
            ``(2) the applicability of this subchapter with respect to 
        customer property or distributions after the exercise of such 
        rights.''.
    (b) Stockbrokers.--Subchapter III of chapter 7 of title 11, United 
States Code, is amended by adding at the end the following:
``Sec. 753. Stockbroker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              securities clearing agencies, swap participants, 
              financial 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, financial participant, repo participant, or master netting 
agreement participant under this title shall not affect--
            ``(1) the priority of any unsecured claim that such person 
        may have after the exercise of those rights; or
            ``(2) the applicability of this subchapter with respect to 
        customer property or distributions after the exercise of such 
        rights.''.
    (c) Clerical Amendments.--The chapter analysis for chapter 7 of 
title 11, United States Code, is amended--
            (1) by inserting after the item relating to section 766 the 
        following:

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

    Section 553 of title 11, United States Code, is amended--
            (1) in subsection (a)(3)(C), by inserting before the period 
        ``(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, 
        560, or 561)''; and
            (2) in subsection (b)(1), by striking ``362(b)(14), 365(h), 
        546(h), or 365(i)(2)'' and inserting ``362(b)(17), 362(b)(19), 
        365(h), 365(i)(2), 546(h), 555, 556, 559, 560, or 561''.

SEC. 213. RECORDKEEPING REQUIREMENTS.

    Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)) is amended by adding at the end the following:
                    ``(F) Recordkeeping requirements.--The Corporation, 
                in consultation with the appropriate Federal banking 
                agencies, may prescribe regulations to require detailed 
                recordkeeping by insured depository institutions with 
                respect to qualified financial contracts (including 
                market valuations).''.

SEC. 214. DAMAGE MEASURE.

    (a) Damage Measure.--
            (1) In general.--Subchapter IV of chapter 5 of title 11, 
        United States Code, as amended by this Act, is amended by 
        adding at the end the following:
``Sec. 562. Damage measure in connection with swap agreements, 
              securities contracts, forward contracts, commodity 
              contracts, repurchase agreements, or master netting 
              agreements
    ``If a trustee rejects a swap agreement, securities contract (as 
that term is defined in section 741), forward contract, repurchase 
agreement, commodity contract, or master netting agreement pursuant to 
section 365(a), or if a forward contract merchant, stockbroker, 
financial institution, securities clearing agency, repo participant, 
master netting agreement participant, commodity contract, or swap 
participant liquidates, terminates, or accelerates any such contract or 
agreement, damages shall be measured as of the earlier of--
            ``(1) the date of that rejection; or
            ``(2) the date of that liquidation, termination, or 
        acceleration.''.
            (2) Clerical amendment.--The chapter analysis for chapter 5 
        of title 11, United States Code, is amended by adding at the 
        end 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 striking ``(g) A claim'' and inserting the 
        following:
    ``(g) Treatment of Claim Upon Rejection.--
            ``(1) In general.--''; and
            (2) by adding at the end the following:
            ``(2) Claims for damages.--A claim for damages calculated 
        in accordance with section 562 shall be allowed under 
        subsection (a), (b), or (c), or shall be disallowed under 
        subsection (d) or (e), as if that claim had arisen before the 
        date of the filing of the petition.''.

SEC. 215. ASSET-BACKED SECURITIZATIONS.

    Section 541 of title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``or'' at the 
                end;
                    (B) by redesignating paragraph (5) as paragraph 
                (6); and
                    (C) by inserting after paragraph (4) the following:
            ``(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 action, to an eligible 
        entity in connection with an asset-backed securitization; or''; 
        and
            (2) by adding at the end the following:
    ``(e) For purposes of this section--
            ``(1) the term `asset-backed securitization' means a 
        transaction in which eligible assets transferred to an eligible 
        entity are used as collateral for 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;
                    ``(B) cash; and
                    ``(C) securities;
            ``(3) the term `eligible entity' means--
                    ``(A) an issuer; or
                    ``(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; and
            ``(5) the term `transferred' means the debtor, pursuant to 
        a written agreement, represented and warranted that eligible 
        assets were sold, contributed, or otherwise conveyed with the 
        intention of removing them from the estate of the debtor 
        pursuant to subsection (b)(5), irrespective 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. 216. APPLICABILITY.

    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.

           TITLE III--ANCILLARY AND OTHER CROSS-BORDER CASES

SEC. 301. AMENDMENT TO ADD A CHAPTER 6 TO TITLE 11, UNITED STATES CODE.

    (a) In General.--Title 11, United States Code, is amended by 
inserting after chapter 5 the following:

          ``CHAPTER 6--ANCILLARY AND OTHER CROSS-BORDER CASES

``Sec.
``601. Purpose and scope of application.
                   ``SUBCHAPTER I--GENERAL PROVISIONS

``602. Definitions.
``603. International obligations of the United States.
``604. Commencement of ancillary case.
``605. Authorization to act in a foreign country.
``606. Public policy exception.
``607. Additional assistance.
``608. Interpretation.
``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE 
                                 COURT

``609. Right of direct access.
``610. Limited jurisdiction.
``611. Commencement of bankruptcy case under section 301 or 303.
``612. Participation of a foreign representative in a case under this 
                            title.
``613. Access of foreign creditors to a case under this title.
``614. Notification to foreign creditors concerning a case under this 
                            title.
    ``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF

``615. Application for recognition of a foreign proceeding.
``616. Presumptions concerning recognition.
``617. Order recognizing a foreign proceeding.
``618. Subsequent information.
``619. Relief that may be granted upon petition for recognition of a 
                            foreign proceeding.
``620. Effects of recognition of a foreign main proceeding.
``621. Relief that may be granted upon recognition of a foreign 
                            proceeding.
``622. Protection of creditors and other interested persons.
``623. Actions to avoid acts detrimental to creditors.
``624. Intervention by a foreign representative.
     ``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN 
                            REPRESENTATIVES

``625. Cooperation and direct communication between the court and 
                            foreign courts or foreign representatives.
``626. Cooperation and direct communication between the trustee and 
                            foreign courts or foreign representatives.
``627. Forms of cooperation.
                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

``628. Commencement of a case under this title after recognition of a 
                            foreign main proceeding.
``629. Coordination of a case under this title and a foreign 
                            proceeding.
``630. Coordination of more than 1 foreign proceeding.
``631. Presumption of insolvency based on recognition of a foreign main 
                            proceeding.
``632. Rule of payment in concurrent proceedings.
``Sec. 601. 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 where--
            ``(1) assistance is sought in the United States by a 
        foreign court or a foreign representative in connection with a 
        foreign proceeding;
            ``(2) assistance is sought in a foreign country in 
        connection with a case under this title;
            ``(3) a foreign proceeding and a case under this title with 
        respect to the same debtor are taking place concurrently; or
            ``(4) creditors or other interested persons in a foreign 
        country have an interest in requesting the commencement of, or 
        participating in, a case or proceeding under this title.
    ``(c) This chapter does not apply to--
            ``(1) a proceeding concerning an entity identified by 
        exclusion in subsection 109(b); or
            ``(2) a natural person or a natural person and that 
        person's spouse who have debts within the limits specified in 
        under section 109(e) and who are citizens of the United States 
        or aliens lawfully admitted for permanent residence in the 
        United States.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

``Sec. 602. 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 
        chapters 9 or 13 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 to be located within that 
        territory, including any property that may properly be seized 
        or garnished by an action in a Federal or State court in the 
        United States.
``Sec. 603. 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. 604. 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 615.
``Sec. 605. Authorization to act in a foreign country
    ``A trustee or another entity designated by the court 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. 606. 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. 607. Additional assistance
    ``(a) Nothing in this chapter limits the power of the court, upon 
recognition of a foreign proceeding, to provide additional assistance 
to a foreign representative under this title or under other laws of the 
United States.
    ``(b) In determining whether to provide additional assistance under 
this title or under other laws of the United States, the court shall 
consider whether such additional assistance, consistent with the 
principles of comity, will reasonably assure--
            ``(1) just treatment of all holders of claims against or 
        interests in the debtor's property;
            ``(2) protection of claim holders in the United States 
        against prejudice and inconvenience in the processing of claims 
        in such foreign proceeding;
            ``(3) prevention of preferential or fraudulent dispositions 
        of property of the debtor;
            ``(4) distribution of proceeds of the debtor's property 
        substantially in accordance with the order prescribed by this 
        title; and
            ``(5) if appropriate, the provision of an opportunity for a 
        fresh start for the individual that such foreign proceeding 
        concerns.
``Sec. 608. 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. 609. Right of direct access
    ``(a) A foreign representative is entitled to commence a case under 
section 604 by filing a petition for recognition under section 615, 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 610, a foreign 
representative has the capacity to sue and be sued.
    ``(c) Recognition under this chapter is prerequisite to the 
granting of comity or cooperation to a foreign proceeding in any State 
or Federal court in the United States. Any request for comity or 
cooperation in any court shall be accompanied by a sworn statement 
setting forth whether recognition under section 615 has been sought and 
the status of any such petition.
    ``(d) 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. 610. Limited jurisdiction
    ``The sole fact that a foreign representative files a petition 
under sections 604 and 615 does not subject the foreign representative 
to the jurisdiction of any court in the United States for any other 
purpose.
``Sec. 611. Commencement of bankruptcy case under section 301 or 303
    ``(a) Upon filing a petition for 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) of this 
section 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) of this 
section prior to such commencement.
    ``(c) A case under subsection (a) shall be dismissed unless 
recognition is granted.
``Sec. 612. 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. 613. 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) of this section 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 those sections shall not be given a lower 
priority than the class of general unsecured claims without priority 
solely because the holder of such claim is a foreign creditor.
    ``(2)(A) Subsection (a) of this section and paragraph (1) of this 
subsection 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. 614. 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) The 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. 615. 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. 616. Presumptions concerning recognition
    ``(a) If the decision or certificate referred to in section 615(b) 
indicates that the foreign proceeding is a foreign proceeding within 
the meaning of section 101(23) and that the person or body is a foreign 
representative within the meaning of section 101(24), 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 the 
documents have been subjected to legal processing under applicable law.
    ``(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. 617. Order recognizing a foreign proceeding
    ``(a) Subject to section 606, 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 602 
        and is a foreign proceeding within the meaning of section 
        101(23);
            ``(2) the person or body applying for recognition is a 
        foreign representative within the meaning of section 101(24); 
        and
            ``(3) the petition meets the requirements of section 615.
    ``(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 602 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 foreign proceeding may be closed in the manner 
prescribed for a case under section 350.
``Sec. 618. Subsequent information
    ``From the time of filing the petition for recognition of the 
foreign proceeding, the foreign representative shall file with the 
court promptly a notice of change of status concerning--
            ``(1) any substantial change in the status of the foreign 
        proceeding or the status of the foreign representative's 
        appointment; and
            ``(2) any other foreign proceeding regarding the debtor 
        that becomes known to the foreign representative.
``Sec. 619. Relief that may be granted upon petition for recognition of 
              a foreign proceeding
    ``(a) From the time of filing a petition for recognition until the 
petition is decided upon, the court may, at the request of the foreign 
representative, where relief is urgently needed to protect the assets 
of the debtor or the interests of the creditors, grant relief of a 
provisional nature, including--
            ``(1) staying execution against the debtor's assets;
            ``(2) entrusting the administration or realization of all 
        or part of the debtor's assets located in the United States to 
        the foreign representative or another person designated 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 621(a).
    ``(b) Unless extended under section 621(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. 620. 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; and
            ``(2) transfer, 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.
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) of this section 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) of this section 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) of this section 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. 621. Relief that may be granted upon recognition of a foreign 
              proceeding
    ``(a) Upon recognition of a foreign proceeding, whether main or 
nonmain, where necessary to effectuate the purpose of this chapter and 
to protect the assets of the debtor or the interests of the creditors, 
the court may, at the request of the foreign representative, grant any 
appropriate relief, including--
            ``(1) staying the commencement or continuation of 
        individual actions or individual proceedings concerning the 
        debtor's assets, rights, obligations or liabilities to the 
        extent they have not been stayed under section 620(a);
            ``(2) staying execution against the debtor's assets to the 
        extent it has not been stayed under section 620(a);
            ``(3) suspending the right to transfer, encumber or 
        otherwise dispose of any assets of the debtor to the extent 
        this right has not been suspended under section 620(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, designated by the 
        court;
            ``(6) extending relief granted under section 619(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, designated by the court, provided that the court 
is satisfied that the interests of creditors in the United States are 
sufficiently protected.
    ``(c) In granting relief under this section to a representative of 
a foreign nonmain proceeding, the court must be satisfied that the 
relief relates to assets that, under the law of the United States, 
should be administered in the foreign nonmain proceeding or concerns 
information required in that proceeding.
    ``(d) The court may not enjoin a police or regulatory act of a 
governmental unit, including a criminal action or proceeding, under 
this section.
``Sec. 622. Protection of creditors and other interested persons
    ``(a) In granting or denying relief under section 619 or 621, or in 
modifying or terminating relief under subsection (c) of this section, 
the court must find that the interests of the creditors and other 
interested persons or entities, including the debtor, are sufficiently 
protected.
    ``(b) The court may subject relief granted under section 619 or 621 
to conditions it considers appropriate.
    ``(c) The court may, at the request of the foreign representative 
or an entity affected by relief granted under section 619 or 621, or at 
its own motion, modify or terminate such relief.
``Sec. 623. Actions to avoid acts detrimental to creditors
    ``(a) Upon recognition of a foreign proceeding, the foreign 
representative has standing in a pending case under another chapter of 
this title to initiate actions under sections 522, 544, 545, 547, 548, 
550, and 724(a).
    ``(b) When the foreign proceeding is a foreign nonmain proceeding, 
the court must be satisfied that an action under subsection (a) of this 
section relates to assets that, under United States law, should be 
administered in the foreign nonmain proceeding.
``Sec. 624. 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. 625. Cooperation and direct communication between the court and 
              foreign courts or foreign representatives
    ``(a) In all matters included within section 601, 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. 626. Cooperation and direct communication between the trustee 
              and foreign courts or foreign representatives
    ``(a) In all matters included in section 601, the trustee or other 
person, including an examiner, designated 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, 
designated by the court is entitled, subject to the supervision of the 
court, to communicate directly with foreign courts or foreign 
representatives.
    ``(c) 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(a).
``Sec. 627. Forms of cooperation
    ``Cooperation referred to in sections 625 and 626 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. 628. 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 that 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 625, 626, and 
627, to other assets of the debtor that are within the jurisdiction of 
the court under sections 541(a) and 1334(e), 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. 629. Coordination of a case under this title and a foreign 
              proceeding
    ``Where a foreign proceeding and a case under another chapter of 
this title are taking place concurrently regarding the same debtor, the 
court shall seek cooperation and coordination under sections 625, 626, 
and 627, and the following shall apply:
            ``(1) When the case in the United States is taking place at 
        the time the petition for recognition of the foreign proceeding 
        is filed--
                    ``(A) any relief granted under sections 619 or 621 
                must be consistent with the case in the United States; 
                and
                    ``(B) even if the foreign proceeding is recognized 
                as a foreign main proceeding, section 620 does not 
                apply.
            ``(2) When a case in the United States under this title 
        commences after recognition, or after the filing of the 
        petition for recognition, of the foreign proceeding--
                    ``(A) any relief in effect under sections 619 or 
                621 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 620(a) shall be modified or terminated if 
                inconsistent with 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 628 and 629, the court may grant any of the relief 
        authorized under section 305.
``Sec. 630. Coordination of more than 1 foreign proceeding
    ``In matters referred to in section 601, with respect to more than 
one foreign proceeding regarding the debtor, the court shall seek 
cooperation and coordination under sections 625, 626, and 627, and the 
following shall apply:
            ``(1) Any relief granted under section 619 or 621 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 619 or 621 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. 631. 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.
``Sec. 632. 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 
5 the following:

``6. Ancillary and Other Cross-Border Cases.................     601''.

SEC. 302. 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, 555 through 557, 
        559, and 560 apply in a case under chapter 6''; and
            (2) by adding at the end the following:
    ``(j) Chapter 6 applies only in a case under that chapter, except 
that section 605 applies to trustees and to any other entity designated 
by the court, including an examiner, under chapters 7, 11, and 12, to 
debtors in possession under chapters 11 and 12, and to debtors or 
trustees under chapters 9 and 13 who are authorized to act under 
section 605.''.
    (b) Definitions.--Section 101 of title 11, United States Code, is 
amended by striking paragraphs (23) and (24) and inserting the 
following:
            ``(23) `foreign proceeding' means a collective judicial or 
        administrative proceeding in a foreign state, 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 1 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 6.''.
            (2) Bankruptcy cases and proceedings.--Section 1334(c) of 
        title 28, United States Code, is amended by striking ``Nothing 
        in'' and inserting ``Except with respect to a case under 
        chapter 6 of title 11, nothing in''.
            (3) Duties of trustees.--Section 586(a)(3) of title 28, 
        United States Code, is amended by inserting ``6,'' after 
        ``chapter''.

                  TITLE IV--SMALL BUSINESS BANKRUPTCY

SEC. 401. SMALL BUSINESS DEFINED.

    Section 101 of title 11, United States Code, is amended by striking 
paragraph (51C) and inserting the following:
            ``(51C) `small business case' means any case filed under 
        chapter 11 of this title in which the debtor is a small 
        business debtor;
            ``(51D) `small business debtor' means--
                    ``(A) any debtor in a case under chapter 11 
                (including any group of affiliated debtors) that, as of 
                the date of filing of the petition for the case 
                involved, has noncontingent, liquidated secured and 
                unsecured debts in an aggregate amount not to exceed 
                $5,000,000 (excluding any debt owed to 1 or more 
                affiliates or insiders); and
                    ``(B) any single asset real estate debtor, without 
                regard to the amount of liabilities of that debtor;''.

SEC. 402. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.

    Section 1125(f) of title 11, United States Code, is amended to read 
as follows:
    ``(f) Notwithstanding subsection (b), in a small business case--
            ``(1) in determining whether a disclosure statement 
        provides adequate information, the court shall consider--
                    ``(A) the size of the case;
                    ``(B) the benefit of additional information to 
                creditors and other parties in interest; and
                    ``(C) the cost of providing additional information;
            ``(2) in an appropriate case the court may determine that--
                    ``(A) the plan provides adequate information; and
                    ``(B) a separate disclosure statement is not 
                necessary;
            ``(3) the court may approve a disclosure statement 
        submitted on standard forms approved by the court or adopted 
        pursuant to section 2075 of title 28;
            ``(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 as long 
        as 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 at least 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 the plan.''.

SEC. 403. STANDARD FORM DISCLOSURE STATEMENTS AND PLANS.

    (a) In General.--The Advisory Committee on Bankruptcy Rules of the 
Judicial Conference shall, within a reasonable period of time after the 
date of enactment of this Act, propose for adoption standard form 
disclosure statements and plans of reorganization for small business 
debtors, as that term is defined in section 101(51C) of title 11, 
United States Code, as added by section 401 of this Act.
    (b) Contents.--The proposed standard form disclosure statements and 
plans for reorganization referred to in subsection (a) shall be 
designed to achieve a practical balance between--
            (1) the reasonable needs of the courts, the United States 
        trustee or bankruptcy administrator, creditors, and other 
        parties in interest for reasonably complete information; and
            (2) economy and simplicity for debtors.

SEC. 404. UNIFORM NATIONAL REPORTING REQUIREMENTS.

    (a) Small Business Debtor Reporting Requirements.--
            (1) In general.--Subchapter I of chapter 3 of title 11, 
        United States Code, is amended by adding at the end the 
        following:
``Sec. 308. Small business debtor reporting requirements
    ``Each small business debtor shall file with the court periodic 
financial reports and other reports that the court determines to be 
appropriate containing information relating to--
            ``(1) the profitability of the debtor that contains 
        specific information concerning the amount of income carried or 
        losses incurred during the then current financial period and 
        any other fiscal period that the court determines to be 
        appropriate;
            ``(2) reasonable approximations of projected cash receipts 
        and cash disbursements over a reasonable period of time (as 
        determined by the court);
            ``(3) with respect to a report submitted under this section 
        after an initial report, a comparison of actual cash receipts 
        and disbursements for the period covered by the report with the 
        projection contained in each preceding report submitted under 
        this subsection;
            ``(4) whether the debtor is--
                    ``(A) in compliance in all material respects with 
                postpetition requirements under this title and the 
                Federal Rules of Bankruptcy Procedure; and
                    ``(B) in a timely manner, filing tax returns and 
                making payments of taxes and other administrative 
                claims;
            ``(5) if the debtor is not filing a tax return or making a 
        payment of a tax or administrative claim--
                    ``(A) the nature of the failure by the debtor to 
                file the return or make the claim; and
                    ``(B) how the debtor intends to remedy the failure, 
                including--
                            ``(i) the cost to the debtor of the remedy; 
                        and
                            ``(ii) when the debtor intends to carry out 
                        the remedy;
            ``(6) such other matters as the court determines to be--
                    ``(A) in the best interests of small business 
                debtors and creditors; and
                    ``(B) in the public interest, in promoting fair and 
                efficient procedures under chapter 11.''.
            (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 307 the following:

``308. Small business debtor reporting requirements.''.
    (b) Effective Date.--The amendments made by this section shall 
become effective 60 days after the date on which the Supreme Court, 
under section 2075 of title 28, United States Code, prescribes rules to 
provide for appropriate forms and reporting under section 308 of title 
11, United States Code.

SEC. 405. UNIFORM REPORTING RULES AND FORMS.

    (a) In General.--The Advisory Committee on Bankruptcy Rules of the 
Judicial Conference shall, within a reasonable period of time after the 
date of enactment of this Act, propose for adoption revisions to the 
Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms 
that would enable small business debtors (as that term is defined in 
section 101(51D) of title 11, United States Code, as added by section 
401 of this Act) to comply with section 308 of title 11, United States 
Code.
    (b) Requirements for Rules.--The rules prescribed under subsection 
(a) shall be designed to achieve a practical balance between--
            (1) the reasonable needs of the courts, the United States 
        trustee or bankruptcy administrator, creditors, and other 
        parties in interest for reasonably complete information; and
            (2) economy and simplicity for debtors.

SEC. 406. DUTIES IN SMALL BUSINESS CASES.

    (a) In General.--Subchapter I of chapter 11 of title 11, United 
States Code, is amended by adding at the end the following:
``Sec. 1115. Duties of a trustee or a debtor in possession in small 
              business cases
    ``In a small business case, a trustee or the debtor in possession, 
in addition to the duties required under 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 order for 
        relief--
                    ``(A) the most recent balance sheet of the trustee 
                or debtor, statement of operations and cashflow 
                statement and most recent Federal income tax return 
                filed by the trustee or the debtor; or
                    ``(B) a statement made under penalty of perjury 
                that--
                            ``(i) no financial statement referred to in 
                        subparagraph (A) has been prepared; or
                            ``(ii) no Federal income tax return 
                        referred to in subparagraph (A) has been filed;
            ``(2) attend, through the senior management personnel or 
        counsel of the debtor or trustee, meetings scheduled by the 
        court or the United States trustee including--
                    ``(A) initial debtor interviews;
                    ``(B) scheduling conferences; and
                    ``(C) meetings of creditors convened under section 
                341;
            ``(3) timely file all schedules and statements of financial 
        affairs, unless the court, after notice and a hearing, grants 
        an extension, except that any such extension shall terminate 
        not later than 30 days after the issuance by the court of the 
        order for relief, unless the court determines that 
        extraordinary and compelling circumstances merit an extension 
        beyond that date;
            ``(4) file all postpetition financial and other reports 
        required by the Federal Rules of Bankruptcy Procedure or by 
        local rule;
            ``(5) maintain insurance customary and appropriate to the 
        industry;
            ``(6)(A) timely file tax returns;
            ``(B) timely pay all administrative expense tax claims, 
        except for any such claim that the trustee or debtor is 
        contesting by appropriate proceedings and with due diligence; 
        and
            ``(C)(i) establish 1 or more separate deposit accounts 
        within 10 business days after the entry of order for relief (or 
        as soon thereafter as practicable in any case in which, during 
        that 10-day period, all banks contacted by the trustee or 
        debtor decline to establish those accounts); and
            ``(ii) deposit in the accounts, within 1 business day after 
        receipt thereof, all taxes collected or withheld by the trustee 
        or debtor for governmental units; and
            ``(7) allow the United States trustee or bankruptcy 
        administrator or its designated representative to inspect the 
        debtor's business premises, books, and records at reasonable 
        times, after reasonable prior written notice, unless the 
        inspection requirement is waived.''.
    (b) Clerical Amendment.--The chapter analysis for chapter 11 of 
title 11, United States Code, is amended by inserting after the item 
relating to section 1114 the following:

``1115. Duties of a trustee or a debtor in possession in small business 
                            cases.''.

SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.

    Section 1121(e) of title 11, United States Code, is amended to read 
as follows:
    ``(e) In a small business case--
            ``(1) only the debtor may file a plan until after 90 days 
        after the entry of the order for relief, unless--
                    ``(A) that period is extended under this 
                subsection, after notice and hearing; or
                    ``(B) the court, for cause, orders otherwise;
            ``(2) the plan, and any necessary disclosure statement, 
        shall be filed on or before 90 days after the entry of the 
        order for relief; and
            ``(3) the period for filing of a plan specified in 
        paragraph (1) or (2) and the period specified in section 
        1129(e) within which the plan is required to be confirmed may 
        be extended only if--
                    ``(A) the debtor, after providing notice to each 
                party in interest, including the United States trustee, 
                demonstrates by clear and convincing evidence that the 
                trustee or debtor will confirm a plan of reorganization 
                within a reasonable period of time;
                    ``(B) the court imposes a termination date by which 
                the debtor shall be required to meet the applicable 
                requirement; and
                    ``(C) the order that providers for the extension is 
                issued before the applicable date specified in 
                paragraph (1) or (2).''.

SEC. 408. PLAN CONFIRMATION DEADLINE.

    Section 1129 of title 11, United States Code, is amended by adding 
at the end the following:
    ``(e) In a small business case, the plan shall be confirmed on or 
before 150 days after the entry of the order for relief, unless such 
time period is extended under section 1121(e)(3).''.

SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.

    Section 105(d)(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 and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(C) except as provided in section 1121(e)(3), in 
                a small business case, the court may not extend a time 
                period specified in section 1121(e) or 1129(e).''.

SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE AND BANKRUPTCY 
              ADMINISTRATOR.

    (a) Duties of the United States Trustee.--Section 586(a)(3) of 
title 28, United States Code, is amended--
            (1) in subparagraph (G), by striking ``and'' at the end;
            (2) by redesignating subparagraph (H) as subparagraph (I); 
        and
            (3) by inserting after subparagraph (G) the following:
                    ``(H) in small business cases, as defined in 
                section 101(51C) of title 11, performing the additional 
                duties specified in that title pertaining to those 
                cases, and in each such case the United States trustee 
                shall--
                            ``(i) conduct an initial debtor interview 
                        with the debtor 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;
                            ``(ii) 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 the debtor's tax 
                        returns;
                            ``(iii) review and monitor diligently the 
                        debtor's activities, to identify as promptly as 
                        practicable after the entry of order for relief 
                        whether the debtor will be unable to confirm a 
                        plan; and
                            ``(iv) in any case in which the United 
                        States trustee finds material grounds for any 
                        relief under section 1112 of title 11, move the 
                        court promptly for relief; and''.
    (b) Duties of the Bankruptcy Administrator.--
            (1) In general.--Subchapter I of chapter 11 of title 11, 
        United States Code, is amended by adding at the end the 
        following:
``Sec. 1116. Duties of the bankruptcy administrator
    ``In small business cases the bankruptcy administrator shall 
perform the duties specified in section 586(a)(3)(H) of title 28, in 
addition to the duties of the United States trustee specified in this 
title.''.
            (2) Clerical amendment.--The chapter analysis for chapter 
        11 of title 11, United States Code, is amended by inserting 
        after the item relating to section 1115 the following:

``1116. Duties of the bankruptcy administrator.''.

SEC. 411. SCHEDULING CONFERENCES.

    Section 105(d) of title 11, United States Code, is amended by 
striking ``The court, on its own motion'' and all that follows through 
``issue an order'' in paragraph (2) and inserting the following:
    ``(d) The court, on its own motion or on the request of a party in 
interest--
            ``(1) shall hold such status conferences as are necessary 
        to further the expeditious and economical resolution of the 
        case; and
            ``(2) may issue an order.''.

SEC. 412. SERIAL FILER PROVISIONS.

    Section 362 of title 11, United States Code, as amended by section 
204(b), is amended by adding at the end the following:
    ``(j)(1) Except as provided in paragraphs (2) and (3), the filing 
of a petition under chapter 11 does not operate as a stay of any act 
described in subsection (a) in any case in which the debtor--
            ``(A) is or was a debtor in a small business case pending 
        at the time of the petition in the subject case;
            ``(B) was a debtor in a small business case that was 
        dismissed for any reason by an order that became final within 2 
        years after the issuance of the order for relief in the subject 
        case;
            ``(C) was a debtor in a small business case in which a plan 
        was confirmed within 2 years after the issuance of the order 
        for relief in the subject case; 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 a debtor if the debtor 
proves, by a preponderance of the evidence, that--
            ``(A) the subject case has resulted from circumstances 
        beyond the control of the debtor not foreseeable at the time 
        the first case was filed; and
            ``(B) it is more likely than not that the debtor will 
        confirm a feasible plan, other than a liquidating plan, within 
        a reasonable period of time.
    ``(3)(A) Except as provided in subparagraph (B), in any case in 
which a debtor has transferred its business or former business to a new 
legal entity that is not a debtor in a case under any chapter of this 
title, the filing of the petition operates as a stay of the acts 
described in subsection (a) of this section.
    ``(B) In any case in which the United States trustee files a 
verified, ex parte motion seeking relief from the stay, the court shall 
grant relief from the stay under subsection (a), by terminating or 
annulling that stay.
    ``(C) With respect to a stay terminated or annulled under paragraph 
(2), if, after notice and hearing, the debtor satisfies the 
requirements of paragraph (2) and shows that immediate and irreparable 
injury, loss, or damage will result to the debtor, the court may order 
that the stay shall be reimposed.''.

SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT 
              OF TRUSTEE.

    (a) Expanded Grounds for Dismissal or Conversion.--Section 1112(b) 
of title 11, United States Code, is amended to read as follows:
    ``(b)(1) Except as provided in paragraph (2), subsection (c), or 
section 1104(a)(3), on request of a party in interest, and after notice 
and a hearing, if the movant establishes cause--
            ``(A) the court shall convert a case under this chapter to 
        a case under chapter 7; or
            ``(B) dismiss a case under this chapter,
whichever is in the best interest of creditors and the estate.
    ``(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--
            ``(A) that it is more likely than not that a plan will be 
        confirmed--
                    ``(i) within an applicable period of time specified 
                in this title;
                    ``(ii) by order of the court entered pursuant to 
                the provisions of section 1121(e)(3); or
                    ``(iii) within a reasonable period of time if there 
                is no applicable period specified in this title; and
            ``(B) if the cause of action is an act or omission of the 
        debtor--
                    ``(i) that there exists a reasonable justification 
                for the act or omission; and
                    ``(ii) that the act or omission will be cured 
                within a reasonable period of time but not to exceed 30 
                days after the court decides the motion specified by 
                the court, unless--
                            ``(I) 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) For purposes of this subsection, the term `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 to timely satisfy any filing or reporting 
        requirement established by this title or by applicable rule;
            ``(G) failure to attend the meeting of creditors convened 
        under section 341(a) of this title or an examination ordered 
        under Rule 2004;
            ``(H) failure to timely provide information or attend 
        meetings reasonably requested by the United States trustee;
            ``(I) failure to timely pay taxes due after the order for 
        relief or to file tax returns due after the order for relief;
            ``(J) failure to file or confirm a plan--
                    ``(i) within the applicable period under this 
                title; or
                    ``(ii) by order of the court; and
            ``(K) failure to pay any fee or charge required under 
        chapter 123 of title 28.
    ``(4)(A) Subject to subparagraph (B), the court shall--
            ``(i) commence a hearing on any motion under this 
        subsection within 30 days after the filing of the motion; and
            ``(ii) decide the motion within 15 days after commencement 
        of the hearing.
    ``(B) The court may extend a period described in clause (i) or (ii) 
of subparagraph (A) with respect to a movant if--
            ``(i) the movant expressly consents to a continuance for a 
        specific period of time; or
            ``(ii) compelling circumstances prevent the court from 
        meeting a time limit established under clause (i) or (ii) of 
        subparagraph (A).''.
    (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) in any case in which 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. 414. SINGLE ASSET REAL ESTATE DEFINED.

    Section 101(51B) of title 11, United States Code, is amended to 
read as follows:
            ``(51B) `single asset real estate' means undeveloped real 
        property or other real property constituting a single property 
        or project, other than residential real property with fewer 
        than 4 residential units, on which--
                    ``(A) is located a single development or project 
                that generates substantially all of the gross income of 
                a debtor; and
                    ``(B) no substantial business is being conducted 
                by--
                            ``(i) a debtor; or
                            ``(ii) a commonly controlled group of 
                        entities all of which are concurrently debtors 
                        in a case under chapter 11 of this title, other 
                        than the business of operating the real 
                        property and activities incidental thereto;''.

SEC. 415. PLAN CONFIRMATION.

    Section 1129(b)(2)(A) of title 11, United States Code, is amended--
            (1) by striking ``or'' at the end of clause (ii); and
            (2) by striking the period at the end of clause (iii) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(iv)(I) the court may find the plan to be fair 
                and equitable in any case in which--
                            ``(aa) a class of secured claims invoke the 
                        applicability of this subparagraph;
                            ``(bb) that class of secured claims has not 
                        made the election provided for under section 
                        1111(b)(1)(A)(i);
                            ``(cc) the plan proponent seeks to confirm 
                        a plan over the rejection by the class of 
                        unsecured claims that includes the deficiency 
                        claim (that would not be paid in full under the 
                        plan) held by the class of secured claims; and
                            ``(dd) the plan is for a debtor that owns, 
                        leases, or otherwise holds single asset real 
                        estate; except that
                    ``(II) the court may find the plan for the debtor 
                to be fair and equitable under this clause only if, in 
                addition to the fulfillment of all other requirements 
                of this section--
                            ``(aa) the value determined in accordance 
                        with this subparagraph (referred to in this 
                        subclause as the `new value') is contributed in 
                        cash on or before the effective date of the 
                        plan, and in a manner in which the only 
                        permissible accounting treatment is for the new 
                        value to be accounted for as equity capital 
                        that is not convertible for or exchangeable 
                        into any other form of capital including debt 
                        capital;
                            ``(bb) the new value is required to be 
                        applied on the effective date of the plan under 
                        the plan to pay down in cash the allowed 
                        secured claims of that class of secured claims 
                        in such amount that, after that payment is 
made, the principal amount of debt secured by the single asset real 
estate does not exceed 75 percent of the value of the single asset real 
estate; and
                            ``(cc) the payment and other terms for the 
                        debt remaining after the mandatory application 
                        of new value as provided in item (bb) satisfy, 
                        in all material particulars, all relevant, 
                        then-prevailing market terms in the locality 
                        for new loans secured by liens on comparable 
                        real estate with respect to--
                                    ``(AA) maturity date;
                                    ``(BB) amortization;
                                    ``(CC) interest rate;
                                    ``(DD) fixed-charge coverage; and
                                    ``(EE) loan documentation.''.

SEC. 416. PAYMENT OF INTEREST.

    Section 362(d)(3) of title 11, United States Code, is amended--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``, or not later than 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 notwithstanding section 363(c)(2) may, in the 
                debtor's sole discretion, be made from rents or other 
                income generated before or after the commencement of 
                the case by or from the property) to each creditor 
                whose claim is secured by that real estate (other than 
                a claim secured by a judgment lien or an unmatured 
                statutory lien), in an amount equal to the interest on 
                the value of the creditor's interest in the real 
                estate, determined at the then-applicable contract rate 
                of interest.''.

                     TITLE V--BANKRUPTCY TAX ISSUES

SEC. 501. EFFECTIVE NOTICE TO GOVERNMENT.

    (a) Clarification of Definition of Governmental Unit.--Section 
101(27) of title 11, United States Code, is amended by striking 
``State;'' and inserting ``State or subdivision thereof;''.
    (b) Safe Harbor Address; Penalties for Failure of Notice.--
            (1) In general.--Section 342 of title 11, United States 
        Code, is amended by adding at the end the following:
    ``(d) If a debtor lists a governmental unit as a creditor in a list 
or schedule, any notice required to be given by the debtor under this 
title, any rule, applicable law, or order of the court, shall identify 
the department, agency, or instrumentality through which the debtor is 
indebted. The debtor shall also 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. 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.
    ``(e) The clerk shall keep and update quarterly, in the form and 
manner as the appropriate Federal official prescribes, and make 
available to debtors, a register in which a governmental unit shall 
designate a safe harbor mailing address for service of notice in cases 
pending in the district. A governmental unit shall file a statement 
with the clerk designating a safe harbor address to which notices are 
to be sent.''.
            (2) Penalties.--Section 342 of title 11, United States 
        Code, as amended by paragraph (1), is amended by adding at the 
        end the following:
    ``(f)(1) Subject to paragraph (2), if, after notice and hearing, a 
governmental unit demonstrates, by a preponderance of the evidence, 
that the governmental unit did not receive timely actual notice as 
required under this section--
            ``(A) any claim, right, or obligation in favor of that 
        governmental unit shall not be discharged; and
            ``(B) any order entered by the court barring the 
        enforcement of, or inhibiting any right, duty, or obligation of 
        that governmental unit shall be void.
    ``(2) The debtor shall have the burden of proof in refuting an 
assertion by a governmental unit under paragraph (1) that the 
governmental unit did not receive the timely actual notice referred to 
in that paragraph.
    ``(3) Notwithstanding paragraph (1), the relief sought by a 
governmental unit under this subsection shall not be granted, if, in a 
hearing under this title, a debtor demonstrates that--
            ``(A) the debtor provided timely actual notice to the 
        governmental unit in a manner reasonably calculated to satisfy 
        the requirements of this subsection; and
            ``(B) if the register referred to in subsection (e), at the 
        time of the notification, included a safe harbor address for 
        the governmental unit involved, the debtor provided the timely 
        actual notice to the governmental unit through the use of such 
        safe harbor address.
    ``(4) No sanction under section 362(h) or any other provision of 
law that provides for the imposition by a court of a sanction for a 
violation of a stay under section 362(h) or a sanction for failing to 
meet the applicable requirements of section 542 or 543 may be imposed, 
unless that violation occurs after a notice of commencement of a case 
made in accordance with this section is received by the entity.''.
    (c) Proposed Revision of Rules for Providing Notice.--
            (1) In general.--The Advisory Committee on Bankruptcy Rules 
        of the Judicial Conference shall, within a reasonable period of 
        time after the date of enactment of this Act, propose for 
        adoption revised rules for the provision by a debtor (or an 
        entity on behalf of which the debtor is required to provide 
        notice) of notice to each Federal, State, or local governmental 
        unit (as that term is defined in section 101(27) of title 11, 
        United States Code) that has regulatory authority with respect 
        to the debtor or is a creditor or potential creditor of that 
        debtor.
            (2) Revised rules.--The proposed rules described in 
        paragraph (1) shall provide for notice reasonably calculated to 
        ensure that the notice will be received by a representative of 
        each governmental unit that is authorized to act on the notice. 
        At a minimum, the proposed rules shall--
                    (A) require that the debtor--
                            (i) identify in the schedules for the case 
                        and the notice, the subdivision, agency, or 
                        entity of the governmental unit with respect to 
                        which the notice should be received; and
                            (ii) provide sufficient information 
                        (including case captions, permit numbers, 
                        taxpayer identification numbers, or similar 
                        identifying information) to permit the 
                        governmental unit entitled to receive that 
                        notice to identify--
                                    (I) the debtor, or the entity on 
                                behalf of which the debtor is obligated 
                                to provide that notice, in the event 
                                the debtor is a successor in interest 
                                or is not the same as the entity that 
                                incurred the debt or obligation;
                                    (II) any property that is the 
                                subject of the claim or obligation 
                                specified in the notice;
                                    (III) the nature of the claim or 
                                obligation referred to in subclause 
                                (II); and
                                    (IV) the purpose of the notice; and
                    (B) provide sufficient information to permit a 
                debtor to identify the appropriate Federal, State, or 
                local governmental unit through the use of a safe 
                harbor list established under section 342(e) of title 
                11, United States Code, as added by subsection (b) of 
                this section.

SEC. 502. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.

    (a) Adoption of Revised Rules for Providing Notice.--The Advisory 
Committee on Bankruptcy Rules of the Judicial Conference shall, within 
a reasonable period of time after the date of enactment of this Act, 
propose for adoption rules under which the Federal, State, and local 
governmental units may designate the manner in which a trustee may make 
a request for the determination of any unpaid liability of the estate 
for any tax incurred during the administration of the case, as provided 
under section 505(b) of title 11, United States Code.
    (b) Notice Required.--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 in the manner designated by that 
governmental unit and unless''.

SEC. 503. 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
    ``In any case in which the holder of a claim for taxes arising 
before the date of the order for relief is entitled to receive interest 
on that claim, the rate of interest to be applied shall be at least the 
rate provided in section 6621(a)(2) of the Internal Revenue Code of 
1986.''.
    (b) Clerical Amendment.--The chapter analysis 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. 504. TOLLING OF PRIORITY OF TAX CLAIM TIME PERIODS.

    Section 507(a)(8)(A) of title 11, United States Code, is amended--
            (1) in clause (i), by inserting before the semicolon at the 
        end the following: ``, plus any time plus 6 months, during 
        which a stay of proceedings against collections was in effect 
        with respect to that tax in a prior case under this title; 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 plus 30 days during 
                                which an offer in compromise or 
                                installment agreement with respect to 
                                that tax, was pending or in effect 
                                during that 240-day period; and
                                    ``(II) any time plus 6 months 
                                during which a stay of proceedings 
                                against collections was in effect with 
                                respect to that tax in a prior case 
                                under this title during that 240-day 
                                period;''.

SEC. 505. ASSESSMENT DEFINED.

    Section 101 of title 11, United States Code, is amended by 
inserting after paragraph (2) the following:
            ``(3)(A) `assessment'--
                    ``(i) for purposes of State and local taxes, means 
                that action which is sufficiently final so that 
                thereafter a taxing authority may commence an action to 
                collect the tax; and
                    ``(ii) for Federal tax purposes has the meaning 
                given such term in the Internal Revenue Code of 1986; 
                and
            ``(B) `assessed' and `assessable' shall be interpreted in a 
        manner consistent with the definition of the term `assessment' 
        in this paragraph;''.

SEC. 506. 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 if, with respect to that tax or 
        duty, the debtor filed a fraudulent return or willfully 
        attempted in any manner to evade or defeat the tax or duty.''.

SEC. 507. THE STAY OF PROCEEDINGS IN TAX COURT.

    (a) Section 362 Stay Limited to Prepetition Taxes.--Section 
362(a)(8) of title 11, United States Code, is amended by striking the 
period at the end and inserting ``, 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.''.

SEC. 508. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.

    Section 1129(a)(9) of title 11, United States Code, is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C)--
                    (A) by inserting ``in quarterly installments or 
                more frequent installments that shall be paid in full 
                not later than 6 years after the date on which the 
                order for relief is issued under this title,'' after 
                ``payments,''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following:
                    ``(D) with respect to a secured claim that would 
                otherwise meet the description of an unsecured claim of 
                a governmental unit under section 507(a)(8), but for 
                the secured status of that claim, the holder of that 
                claim will receive, on account of that claim, cash 
                payments, in the same manner and over the same period, 
                as prescribed in subparagraph (C).''.

SEC. 509. THE 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 6123 of the 
Internal Revenue Code of 1986, or in any other similar provision of 
State or local law;''.

SEC. 510. COURSE OF BUSINESS PAYMENT OF TAXES.

    (a) Payment of Taxes Required.--Section 960 of title 28, United 
States Code, is amended by striking the period at the end and inserting 
the following: ``, and except with respect to a property tax secured by 
a lien against property of the estate that is abandoned by the trustee 
of a bankruptcy estate pursuant to section 554 of title 11, shall pay 
each such tax when due in the course of that business. An officer or 
agent described in the preceding sentence shall pay any property tax 
secured by a lien described in the preceding sentence within a 
reasonable period of time after the lien attaches.''.
    (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,'', after ``estate,''.
    (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 inserting ``and'' at the end; 
        and
            (3) by adding at the end the following:
                    ``(D) notwithstanding 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);''.

SEC. 511. TARDILY FILED PRIORITY TAX CLAIMS.

    Section 726(a)(1) of title 11, United States Code, is amended by 
striking ``the trustee commences distribution under this section;'' and 
inserting ``the court approves the final report and accounting of the 
trustee;''.

SEC. 512. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.

    Section 523(a) of title 11, United States Code, is amended--
            (1) in paragraph (1)(B)--
                    (A) in clause (i), by striking ``or'' at the end; 
                and
                    (B) by adding at the end the following:
                            ``(iii) did not satisfy the requirements of 
                        applicable nonbankruptcy law or was not filed 
                        in the manner prescribed by applicable 
                        nonbankruptcy law; or''; and
            (2) by adding at the end the following flush sentence:
``For purposes of this subsection, the term `return' does not include a 
return made pursuant to section 6020(b) of the Internal Revenue Code of 
1986, or similar State or local law.''.

SEC. 513. THE DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.

    The second sentence of section 505(b) of title 11, United States 
Code, is amended by inserting ``the estate,'' after 
``misrepresentation,''.

SEC. 514. STANDARDS FOR TAX DISCLOSURE.

    Section 1125(a)(1) of title 11, United States Code, is amended--
            (1) by inserting ``including, with respect to a plan, a 
        full discussion of the potential material Federal and State tax 
        consequences of the plan with respect to the debtor, any 
        successor to the debtor, and a hypothetical investor 
        representative of the holders of claims or interests in the 
        case,'' after ``records,'';
            (2) by inserting ``such'' after ``enable''; and
            (3) by striking ``hypothetical reasonable investor typical 
        of holders of claims or interests'' and inserting 
        ``hypothetical investor''.

SEC. 515. SETOFF OF TAX REFUNDS.

    Section 362(b) of title 11, United States Code, as amended by 
section 204, is amended--
            (1) in paragraph (18), by striking ``or'' at the end;
            (2) in paragraph (19), by striking the period at the end 
        and inserting ``, or'';
            (3) by inserting after paragraph (19) the following:
            ``(20) under subsection (a), of the setoff of an income tax 
        refund by a governmental unit, with respect to a taxable period 
        that ends before the order for relief against an income tax 
        liability for a taxable period that ends before the order for 
        relief, unless before that setoff, an action is commenced under 
        section 505(a) to determine the amount or legality of that tax 
        liability.''; and
            (4) in the flush material following paragraph (19), by 
        adding at the end the following: ``In any case referred to in 
        paragraph (19) in which the setoff of an income tax refund is 
        not permitted by reason of a pending action to determine the 
        amount or legality of a tax liability, the governmental unit 
        involved may hold the refund pending the resolution of the 
        action.''.

                        TITLE VI--MISCELLANEOUS

SEC. 601. 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. 602. ALLOWANCE OF CLAIMS OR INTERESTS.

    Section 502(b)(6) of title 11, United States Code, is amended to 
read as follows:
            ``(6)(A) if that claim is the claim of a lessor for damages 
        resulting from the termination of a lease of real property, 
        that claim exceeds an amount equal to the sum of--
                    ``(i) monetary obligations under the lease 
                (including rent, percentage rent, additional rent, 
                common area maintenance charges, taxes, utilities, 
                reasonable attorneys' fees, and other costs), without 
                acceleration, for the period beginning immediately 
                after that termination of the lease and ending on the 
                later of--
                            ``(I) 1 year after the date of that 
                        termination; or
                            ``(II) the date on which 15 percent of the 
                        remaining term of the lease would have tolled, 
                        but for the termination of the lease, but not 
                        later than 3 years after the date of that 
                        termination;
                    ``(ii) any unpaid monetary obligations due under 
                the lease, without acceleration, as of the date of 
                filing of the petition; and
                    ``(iii) all costs (including tenant improvements 
                and brokers' fees or commissions) that are reasonably 
                incurred (or will, as of the date of the determination 
                of the sum under this subparagraph, be reasonably 
                incurred) during the 1-year period beginning on the 
                date of the termination of the lease; except that
            ``(B) any mitigation that is required by law resulting from 
        the termination of the lease shall be applied against the claim 
        of the lessor without regard to the limitations imposed under 
        clauses (i) through (iii) of subparagraph (A);''.

SEC. 603. EXPEDITED APPEALS OF BANKRUPTCY CASES TO COURTS OF APPEALS.

    (a) In General.--Section 158 of title 28, United States Code, is 
amended--
            (1) by redesignating subsection (d) as subsection (e);
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d)(1) Any final judgment, decision, order, or decree of a 
bankruptcy judge entered for a case in accordance with section 157 may 
be appealed by any party in such case to the appropriate court of 
appeals if--
            ``(A) an appeal from such judgment, decision, order, or 
        decree is first filed with the appropriate district court of 
        the United States; and
            ``(B) the decision on the appeal described under 
        subparagraph (A) is not filed by a district court judge within 
        30 days after the date such appeal is filed with the district 
        court.
    ``(2) On the date that an appeal is filed with a court of appeals 
under paragraph (1), the chief judge for such court of appeals shall 
issue an order to the clerk for the district court from which the 
appeal is filed. Such order shall direct the clerk to enter the final 
judgment, decision, order, or decree of the bankruptcy judge as the 
final judgment, decision, order, or decree of the district court.''; 
and
            (3) in subsection (e) (as redesignated by paragraph (1) of 
        this section) by striking ``subsections (a) and (b)'' and 
        inserting ``subsections (a), (b), and (d)''.
    (b) Technical and Conforming Amendments.--
            (1) Section 305(c) of title 11, United States Code, is 
        amended by striking ``section 158(d)'' and inserting ``section 
        158(e)''.
            (2) Section 1334(d) of title 28, United States Code, is 
        amended by striking ``section 158(d)'' and inserting ``section 
        158(e)''.
            (3) Section 1452(b) of title 28, United States Code, is 
        amended by striking ``section 158(d)'' and inserting ``section 
        158(e)''.

SEC. 604. 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. 605. REPEAL OF SUNSET PROVISION.

    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. 606. CASES ANCILLARY TO FOREIGN PROCEEDINGS.

    Section 304 of title 11, United States Code, as amended by section 
210, is amended by adding at the end the following:
    ``(e)(1) In this subsection--
            ``(A) the term `domestic insurance company' means a 
        domestic insurance company, as that term is used in section 
        109(b)(2);
            ``(B) the term `foreign insurance company' means a foreign 
        insurance company, as that term is used in section 109(b)(3);
            ``(C) the term `United States claimant' means a beneficiary 
        of any deposit referred to in paragraph (2)(A) or any 
        multibeneficiary trust referred to in subparagraph (B) or (C) 
        of paragraph (2);
            ``(D) 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
            ``(E) the term `United States policyholder' means a holder 
        of an insurance policy issued in the United States.
    ``(2) Notwithstanding subsections (b) and (c), the court may not 
grant relief under subsection (b) to a foreign insurance company that 
is not engaged in the business of insurance or reinsurance in the 
United States with respect to any claim made by a United States 
creditor against--
            ``(A) a deposit required by an applicable State insurance 
        law;
            ``(B) a multibeneficiary trust required by an applicable 
        State insurance law to protect United States policyholders or 
        claimants against a foreign insurance company; or
            ``(C) a multibeneficiary trust authorized under an 
        applicable State insurance law to allow a domestic insurance 
        company that cedes reinsurance to the debtor to reflect the 
        reinsurance as an asset or deduction from liability in the 
        ceding insurer's financial statements.''.
                                 <all>