[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4866 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 4866

     To promote responsibility by improving development education.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 2, 2006

   Mr. Ford introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
 Financial Services, Education and the Workforce, and Judiciary, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
     To promote responsibility by improving development education.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promote Responsibility by Improving 
Development Education Act of 2006''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
                      TITLE I--CHARACTER EDUCATION

Sec. 101. Short title.
Sec. 102. Increased funding for Partnerships in Character Education 
                            Program.
Sec. 103. Model State character education curriculum.
                      TITLE II--CHILDHOOD ADOPTION

Sec. 201. Short title.
Sec. 202. Increase in allowable expenses for adoption; adoption credit 
                            made refundable.
Sec. 203. Increase in adoption incentive payments.
                  TITLE III--BORROWER'S BILL OF RIGHTS

Sec. 301. Short title.
Sec. 302. Assistant secretary of the treasury for financial education.
Sec. 303. Financial literacy for middle and high school students.
Sec. 304. ``Plain language'' disclosures.
Sec. 305. Limitation on usurious interest rates and unfair practices.
Sec. 306. Limitation on rollovers of payday loans.
Sec. 307. Fair treatment of employee benefits.
Sec. 308. Wage priority and employee benefit cap.
Sec. 309. Subordination.

                      TITLE I--CHARACTER EDUCATION

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Character Education Act of 2006''.

SEC. 102. INCREASED FUNDING FOR PARTNERSHIPS IN CHARACTER EDUCATION 
              PROGRAM.

    Section 5401 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7241) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``There are'' and inserting ``(a) In General.--There are'';
            (2) in paragraph (6), by striking ``$675,000,000 for fiscal 
        year 2007'' and inserting ``$700,000,000 for fiscal year 
        2007''; and
            (3) by adding at the end the following:
    ``(b) Partnerships in Character Education.--From the amount 
appropriated to carry out this part for each of fiscal years 2007 and 
2008, the Secretary shall reserve $50,000,000 to carry out subpart 
3.''.

SEC. 103. MODEL STATE CHARACTER EDUCATION CURRICULUM.

    (a) In General.--The Comptroller General of the United States 
shall--
            (1) conduct a study of best practices in the field of 
        character education; and
            (2) develop a model State character education curriculum 
        for kindergarten through grade 12.
    (b) Model State Character Education Curriculum.--
            (1) Principles of curriculum.--The model State character 
        education curriculum developed under this section shall embody 
        the principles that character education--
                    (A) is premised on the notion that widely shared 
                core ethical values, including honesty, fairness, 
                justice, caring, responsibility, and respect for self 
                and others, form the basis of good character;
                    (B) by promoting the validity of these values and 
                the responsibility to uphold them, affirms human 
                dignity, promotes the development and welfare of the 
                individual, serves the common good, and promotes the 
                exercise of citizenship in a democratic society; and
                    (C) should be an integral part of the curriculum at 
                all grade levels, should be part of a comprehensive 
                approach that integrates character development into 
                every aspect of school life, and should reach out to 
                families and include them in character-building 
                efforts.
            (2) Focus on aspects of character.--The model State 
        character education curriculum developed under this section 
        shall focus on aspects of character including honesty, 
        fairness, justice, caring, responsibility, and respect for self 
        and others.
    (c) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Comptroller General of the United States shall submit 
to the Congress a report containing--
            (1) the results of the study conducted under this section; 
        and
            (2) the model State character education curriculum 
        developed under this section.

                      TITLE II--CHILDHOOD ADOPTION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Childhood Adoption Act of 2006''.

SEC. 202. INCREASE IN ALLOWABLE EXPENSES FOR ADOPTION; ADOPTION CREDIT 
              MADE REFUNDABLE.

    (a) Increase in Dollar Limitation.--
            (1) Adoption credit.--
                    (A) In general.--Paragraph (1) of section 23(b) of 
                the Internal Revenue Code of 1986 (relating to dollar 
                limitation) is amended by striking ``$10,000'' and 
                inserting ``$15,000''.
                    (B) Child with special needs.--Paragraph (3) of 
                section 23(a) of such Code (relating to $10,000 credit 
                for adoption of child with special needs regardless of 
                expenses) is amended--
                            (i) in the text by striking ``$10,000'' and 
                        inserting ``$15,000'', and
                            (ii) in the heading by striking ``$10,000'' 
                        and inserting ``$15,000''.
                    (C) Conforming amendment to inflation adjustment.--
                Subsection (h) of section 23 of such Code (relating to 
                adjustments for inflation) is amended to read as 
                follows:
    ``(h) Adjustments for Inflation.--
            ``(1) Dollar limitations.--In the case of a taxable year 
        beginning after December 31, 2006, each of the dollar amounts 
        in subsections (a)(3) and (b)(1) shall be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2005' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not 
        a multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.
            ``(2) Income limitation.--In the case of a taxable year 
        beginning after December 31, 2002, the dollar amount in 
        subsection (b)(2)(A)(i) shall be increased by an amount equal 
        to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2001' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not 
        a multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.''.
            (2) Adoption assistance programs.--
                    (A) In general.--Paragraph (1) of section 137(b) of 
                the Internal Revenue Code of 1986 (relating to dollar 
                limitation) is amended by striking ``$10,000'' and 
                inserting ``$15,000''.
                    (B) Child with special needs.--Paragraph (2) of 
                section 137(a) of such Code (relating to $10,000 
                exclusion for adoption of child with special needs 
                regardless of expenses) is amended--
                            (i) in the text by striking ``$10,000'' and 
                        inserting ``$15,000'', and
                            (ii) in the heading by striking ``$10,000'' 
                        and inserting ``$15,000''.
                    (C) Conforming amendment to inflation adjustment.--
                Subsection (f) of section 137 of such Code (relating to 
                adjustments for inflation) is amended to read as 
                follows:
    ``(f) Adjustments for Inflation.--
            ``(1) Dollar limitations.--In the case of a taxable year 
        beginning after December 31, 2006, each of the dollar amounts 
        in subsections (a)(2) and (b)(1) shall be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2005' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not 
        a multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.
            ``(2) Income limitation.--In the case of a taxable year 
        beginning after December 31, 2002, the dollar amount in 
        subsection (b)(2)(A)(i) shall be increased by an amount equal 
        to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2001' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not 
        a multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.''.
    (b) Credit Made Refundable.--
            (1) Credit moved to subpart relating to refundable 
        credits.--The Internal Revenue Code of 1986 is amended--
                    (A) by redesignating section 36 as section 37,
                    (B) by redesignating section 23, as amended by 
                subsection (a), as section 36, and
                    (C) by moving section 36 (as so redesignated) from 
                subpart A of part IV of subchapter A of chapter 1 to 
                the location immediately before section 37 (as so 
                redesignated) in subpart C of part IV of subchapter A 
                of chapter 1.
            (2) Conforming amendments.--
                    (A) Section 24(b)(3)(B) of such Code is amended by 
                striking ``and sections 23'' and inserting ``section''.
                    (B) Section 25(e)(1)(C) of such Code is amended by 
                striking ``23,''.
                    (C) Section 25B(g)(2) of such Code is amended by 
                striking ``and section 23''.
                    (D) Section 137 of such Code is amended--
                            (i) in subsection (d) by striking ``section 
                        23(d)'' and inserting ``section 36(d)'', and
                            (ii) in subsection (e) by striking 
                        ``section 23'' and inserting ``section 36''.
                    (E) Section 1400C(d) of such Code is amended by 
                striking ``23, 24,'' and inserting ``24''.
                    (F) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 of such Code of 1986 is 
                amended by striking the item relating to section 23.
                    (G) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting ``or 36'' 
                after ``section 35''.
                    (H) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986 is amended by striking the last item and 
                inserting the following new items:

``Sec. 36. Adoption expenses.
``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 203. INCREASE IN ADOPTION INCENTIVE PAYMENTS.

    (a) In General.--Section 473A(d)(1) of the Social Security Act (42 
U.S.C. 673a(d)(1)) is amended--
            (1) in subparagraph (A), by striking ``$4,000'' and 
        inserting ``$8,000'';
            (2) in subparagraph (B), by striking ``$2,000'' and 
        inserting ``$8,000''; and
            (3) in subparagraph (C), by striking ``$4,000'' and 
        inserting ``$8,000''.
    (b) Increased Program Funding.--Section 473A(h)(1) of such Act (42 
U.S.C. 673a(h)(1)) is amended--
            (1) in subparagraph (C), by striking ``and'';
            (2) in subparagraph (D), by striking ``through 2008.'' and 
        inserting ``and 2005; and''; and
            (3) by adding at the end the following:
                    ``(E) $86,000,000 for each of fiscal years 2006 
                through 2008.''.

                  TITLE III--BORROWER'S BILL OF RIGHTS

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Borrower's Bill of Rights Act''.

SEC. 302. ASSISTANT SECRETARY OF THE TREASURY FOR FINANCIAL EDUCATION.

    Section 301(e) of title 31, United States Code, is amended--
            (1) by striking ``7 Assistant Secretaries'' and inserting 
        ``8 Assistant Secretaries''; and
            (2) by inserting after the 2nd sentence the following new 
        sentence: ``One of the Assistant Secretaries shall be the 
        Assistant Secretary for Financial Education.''.

SEC. 303. FINANCIAL LITERACY FOR MIDDLE AND HIGH SCHOOL STUDENTS.

    The Financial Literacy and Education Improvement Act (20 U.S.C. 
9701, et seq.) is amended--
            (1) by redesignating section 519 as section 520; and
            (2) by inserting after section 518 the following new 
        section:

``SEC. 519. FINANCIAL LITERACY FOR MIDDLE AND HIGH SCHOOL STUDENTS.

    ``(a) Pilot Program.--The Assistant Secretary for Financial 
Education (hereafter in this section referred to as the `Assistant 
Secretary' shall establish a 2-year pilot financial literacy pilot 
program for middle and high school students.
    ``(b) Requirements.--The pilot program established by the Assistant 
Secretary shall comply with the following requirements:
            ``(1) The pilot program shall be implemented in 10 middle 
        schools and 10 high schools, selected by the Assistant 
        Secretary based on such criteria as the Assistant Secretary may 
        determine to be appropriate, in 10 different school systems and 
        provided to 8th grade students at the middle schools selected 
        and 12th grade students at the high schools selected.
            ``(2) The program shall use as guidance the financial 
        education program in the secondary schools of the State of 
        Delaware called the `Keys to Financial Success'.
            ``(3) The program shall be funded by the Secretary of the 
        Treasury, out of funds appropriated to the Secretary, and 
        administered by the State and the local school administration 
        of each school selected, based on criteria established by the 
        Assistant Secretary, including an annual update of the 
        materials used in the curriculum.
    ``(c) Report.--Upon the completion of the 2-year pilot program, the 
Assistant Secretary shall submit to the Secretary of the Treasury and 
the Congress a report containing a detailed description of the findings 
and conclusions of the Assistant Secretary with respect to the pilot 
program.''.

SEC. 304. ``PLAIN LANGUAGE'' DISCLOSURES.

    Section 122 of the Truth in Lending Act (15 U.S.C. 1632) is amended 
by adding at the end the following new subsection:
    ``(d) Plain and Simple Language Disclosures Required for All 
Disclosures.--The Board shall take such action as may be necessary to 
ensure that all disclosures that are required to be provided under this 
title with respect to any consumer credit transaction, including all 
the disclosures required under section 129, shall be simple and easy to 
understand and in a language understood by the consumer.''.

SEC. 305. LIMITATION ON USURIOUS INTEREST RATES AND UNFAIR PRACTICES.

    (a) Repeal of Preemption of State Mortgage Usury Laws.--
            (1) In general.--Sections 501, 511, 512, 525, 526, 527, 
        528, and 529 of the Depository Institutions Deregulation and 
        Monetary Control Act of 1980 are hereby repealed.
            (2) Technical and conforming amendments.--
                    (A) Insured depository institutions.--Section 27 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1831d) is 
                amended to read as follows:

``SEC. 27. UNIFORM APPLICABILITY OF STATE LAW.

    ``In order to prevent discrimination against State-chartered 
insured depository institutions, including insured savings banks and 
insured branches of foreign banks and notwithstanding any other 
provision of Federal law, the provision of the constitution or the laws 
of any State expressly limiting the rate or amount of interest, 
discount points, finance charges, or other charges which may be 
charged, taken, received, or reserved shall apply to all depository 
institutions that are located in, have any branch in, or do business in 
such State with respect to customers of any such institution which 
reside in or are located in such State.''.
                    (B) Insured credit unions.--Section 205(g) of the 
                Federal Credit Union Act (12 U.S.C. 1785(g)) is amended 
                to read as follows:
    ``(g) Uniform Applicability of State Law.--In order to prevent 
discrimination against State-chartered insured credit unions and 
notwithstanding any other provision of Federal law, the provision of 
the constitution or the laws of any State expressly limiting the rate 
or amount of interest, discount points, finance charges, or other 
charges which may be charged, taken, received, or reserved shall apply 
to all credit unions that are located in, have any branch in, or do 
business in such State with respect to customers of any such credit 
union which reside in or are located in such State.''.
    (b) Prohibition on Loan ``Flipping'' and Mandatory Arbitration.--
            (1) In general.--Chapter 2 of the Truth in Lending Act (15 
        U.S.C. 1631 et seq.) is amended by inserting after section 129 
        the following new section:
``Sec. 129A. Protections for all loans
    ``(a) Flipping.--
            ``(1) In general.--No creditor may knowingly or 
        intentionally engage in the unfair act or practice of flipping.
            ``(2) Flipping defined.--For purposes of this subsection, 
        the term `flipping' means the making of a loan or extension of 
        credit to a consumer which refinances an existing loan or other 
        extension of credit when the new loan or extension of credit 
        does not have reasonable, tangible net benefit to the consumer 
        considering all of the circumstances, including the terms of 
        both the new and the refinanced loans or credit, the cost of 
        the new loan or credit, and the consumer's circumstances.
            ``(3) Tangible net benefit.--The Board may prescribe 
        regulations, in the discretion of the Board, defining the term 
        `tangible net benefit' for purposes of this subsection.
    ``(b) Arbitration.--
            ``(1) In general.--A loan or other extension of credit 
        subject to this title may not include terms which require 
        arbitration or any other nonjudicial procedure as the method 
        for resolving any controversy or settling any claims arising 
        out of the transaction.
            ``(2) Post-controversy agreements.--Subject to paragraph 
        (3), paragraph (1) shall not be construed as limiting the right 
        of the consumer and the creditor to agree to arbitration or any 
        other nonjudicial procedure as the method for resolving any 
        controversy at any time after a dispute or claim under the 
        transaction arises.
            ``(3) No waiver of statutory cause of action.--No provision 
        of any loan or other extension of credit or any agreement 
        between the consumer and the creditor shall be applied or 
        interpreted so as to bar a consumer from bringing an action in 
        an appropriate district court of the United States, or any 
        other court of competent jurisdiction, pursuant to section 130 
        or any other provision of law, for damages or other relief in 
        connection with any alleged violation of this section, any 
        other provision of this title, or any other Federal law.''.
            (2) Clerical amendment.--The table of sections for chapter 
        2 of the Truth in Lending Act is amended by inserting after the 
        item relating to section 129 the following new item:

``129A. Protections for all loans.''.
            (3) Regulations.--The Board of Governors of the Federal 
        Reserve System shall publish regulations implementing the 
        amendments made by this section in final form before the end of 
        the 6-month period beginning on the date of enactment of this 
        Act.
    (c) Amendment to Definition of High Cost Mortgages.--Subparagraph 
(A) of section 103(aa)(1) of the Truth in Lending Act (15 U.S.C. 
1602(aa)(1)(A)) is amended by striking ``10 percentage points'' and 
inserting ``8 percentage points''.
    (d) Pre-Loan Counseling Required for High Cost Mortgages.--Section 
129 of the Truth in Lending Act (15 U.S.C. 1639) is amended by 
inserting after subsection (l) the following new subsection:
    ``(m) Pre-Loan Counseling.--
            ``(1) In general.--A creditor may not extend credit to a 
        consumer under a mortgage referred to in section 103(aa) 
        without first receiving certification from a counselor that is 
        approved by the Secretary of Housing and Urban Development, 
        that the consumer has received--
                    ``(A) and successfully completed counseling, in 
                person or by telephone, on the advisability of the loan 
                transaction; and
                    ``(B) a general range of interest rates that the 
                applicant qualifies for given their credit score.
            ``(2) Nonaffiliation rule for counselors.--A counselor 
        providing a certification to a creditor under paragraph (1) may 
        not be employed by the creditor or an affiliate of the creditor 
        or be affiliated with the creditor in any other manner 
        (including any referral agreement).
            ``(3) Disclosures required prior to counseling.--No 
        counselor may certify that a borrower has received counseling 
        on the advisability of the loan transaction unless the 
        counselor can verify that the consumer has received each 
        statement required (in connection with such loan) by this 
        section, or by the Real Estate Settlement Procedures Act of 
        1974, with respect to the transaction.
            ``(4) Regulations.--The Secretary of Housing and Urban 
        Development may prescribe such regulations as the Secretary 
        determines to be appropriate to carry out the requirements of 
        paragraph (1).''.

SEC. 306. LIMITATION ON ROLLOVERS OF PAYDAY LOANS.

    Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended 
by adding at the end the following new subsection:
    ``(e) Limitations on Rollovers or Refinancing of Payday Loans With 
the Same Creditor.--
            ``(1) In general.--A payday lender--
                    ``(A) may not refinance or roll over any payday 
                loan made by such lender, or any affiliate or other 
                associate of the payday lender, to any consumer with 
                another payday loan more than 3 times; and
                    ``(B) shall provide a consumer who seeks to 
                refinance or roll over any payday loan made by such 
                lender, or any affiliate or other associate of the 
                payday lender, to the consumer with another payday loan 
                more than 2 times with a disclosure notice, which the 
                Board shall prescribe by regulation, regarding the 
                hazards of payday lending and the benefits of banking 
                traditionally, in prominent format and type-size, that 
                is separate from the disclosures required under 
                subsection (a) with regard to such extension of credit.
            ``(2) Definitions.--
                    ``(A) Check.--The term `check' means any negotiable 
                demand draft drawn on or payable through an office of a 
                depository institution (as defined in section 
                19(b)(1)(A) of the Federal Reserve Act) located in any 
                State.
                    ``(B) Payday lender.--The term `payday lender' 
                means any person who extends credit to any other person 
                through a payday loan.
                    ``(C) Payday loan.--The term `payday loan' means 
                means a transaction in which credit is extended by a 
                payday lender, for a specified period of time, upon 
                receipt by the lender of--
                            ``(i) a check made by the borrower for the 
                        amount of the credit extended, the presentment 
                        or negotiation of which, by mutual agreement of 
                        the lender and borrower, will be deferred for 
                        such specified period; or
                            ``(ii) authorization from the borrower for 
                        the payday lender to initiate an electronic 
                        fund transfer at the end of the specified 
                        period from the account of the borrower for the 
                        amount of the credit extended.''.

SEC. 307. FAIR TREATMENT OF EMPLOYEE BENEFITS.

    (a) Definition of Claim.--Section 101(5) of title 11, United States 
Code, is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by inserting ``or'' after the 
        semicolon; and
            (3) by adding at the end the following:
                    ``(C) right or interest in equity securities of the 
                debtor, or an affiliate of the debtor, held in a 
                pension plan (within the meaning of section 3(2) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1002(2))) for the benefit of an individual who 
                is not an officer or director of the debtor, if such 
                securities were attributable to--
                            ``(i) employer contributions by the debtor 
                        or an affiliate of the debtor other than 
                        elective deferrals (within the meaning of 
                        section 402(g) of the Internal Revenue Code of 
                        1986), and any earnings thereon; and
                            ``(ii) elective deferrals (and any earnings 
                        thereon) that are required to be invested in 
                        such securities under the terms of the plan or 
                        at the direction of a person other than the 
                        individual or any beneficiary,
                except that this subparagraph shall not apply to any 
                such securities during any period during which the 
                individual or any beneficiary has the right to direct 
                the plan to divest such securities and to reinvest an 
                equivalent amount in other investment options of the 
                plan;''.
    (b) Priorities.--Section 507(a)(4) of title 11, United States Code, 
is amended--
            (1) in subparagraph (B), by indenting the left margin of 
        clauses (i) and (ii) 2 ems to the right and redesignating such 
        clauses as subclauses (I) and (II), respectively;
            (2) by indenting the left margin of subparagraphs (A) and 
        (B) 2 ems to the right and redesignating such subparagraphs as 
        clauses (i) and (ii), respectively;
            (3) in the matter preceding clause (i), as so redesignated, 
        by striking ``Fourth'' and all that follows through ``plan--'' 
        and inserting the following: ``Fourth--
                    ``(A) allowed unsecured claims for contributions to 
                an employee benefit plan--''.
            (4) by striking the period at the end and inserting the 
        following: ``or''; and
            (5) by adding at the end the following:
                    ``(B) allowed unsecured claims with respect to 
                rights or interests in equity securities of the debtor, 
                or an affiliate of the debtor, that are held in a 
                pension plan (within the meaning of section 3(2) of the 
                Employee Retirement Income Security Act of 1974), 
                without regard to when services were rendered or 
                limitation in amount, and measured by the market value 
                of the stock at the time the stock was contributed to, 
                or purchased by, the plan.''.

SEC. 308. WAGE PRIORITY AND EMPLOYEE BENEFIT CAP.

    Section 507(a) of title 11, United States Code, is amended--
            (1) in paragraph (3), by striking ``$4,000'' and inserting 
        ``$13,500''; and
            (2) in paragraph (4)(B)(i), by striking ``$4,000'' and 
        inserting ``$13,500''.

SEC. 309. SUBORDINATION.

    Section 510(b) of title 11, United States Code, is amended by 
inserting ``, other than a claim described in section 105(5)(C).'' 
after ``claim'' the 1st place it appears.
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