[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 256 Enrolled Bill (ENR)]
S.256
One Hundred Ninth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the fourth day of January, two thousand and five
An Act
To amend title 11 of the United States Code, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; references; table of contents.
TITLE I--NEEDS-BASED BANKRUPTCY
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Sense of Congress and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
Sec. 107. Schedules of reasonable and necessary expenses.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation agreement practices.
Sec. 204. Preservation of claims and defenses upon sale of predatory
loans.
Sec. 205. GAO study and report on reaffirmation agreement process.
Subtitle B--Priority Child Support
Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 215. Nondischargeability of certain debts for alimony, maintenance,
and support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential
transfer motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and loans.
Subtitle C--Other Consumer Protections
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of personally identifiable information.
Sec. 232. Consumer privacy ombudsman.
Sec. 233. Prohibition on disclosure of name of minor children.
Sec. 234. Protection of personal information.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Technical amendments.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not
complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Reduction of homestead exemption for fraud.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide
required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the
plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the
Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitations on homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and
other property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy
professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Delay of discharge during pendency of certain proceedings.
Sec. 331. Limitation on retention bonuses, severance pay, and certain
other payments.
Sec. 332. Fraudulent involuntary bankruptcy.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
Sec. 401. Adequate protection for investors.
Sec. 402. Meetings of creditors and equity security holders.
Sec. 403. Protection of refinance of security interest.
Sec. 404. Executory contracts and unexpired leases.
Sec. 405. Creditors and equity security holders committees.
Sec. 406. Amendment to section 546 of title 11, United States Code.
Sec. 407. Amendments to section 330(a) of title 11, United States Code.
Sec. 408. Postpetition disclosure and solicitation.
Sec. 409. Preferences.
Sec. 410. Venue of certain proceedings.
Sec. 411. Period for filing plan under chapter 11.
Sec. 412. Fees arising from certain ownership interests.
Sec. 413. Creditor representation at first meeting of creditors.
Sec. 414. Definition of disinterested person.
Sec. 415. Factors for compensation of professional persons.
Sec. 416. Appointment of elected trustee.
Sec. 417. Utility service.
Sec. 418. Bankruptcy fees.
Sec. 419. More complete information regarding assets of the estate.
Subtitle B--Small Business Bankruptcy Provisions
Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment
of trustee.
Sec. 443. Study of operation of title 11, United States Code, with
respect to small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.
Sec. 446. Duties with respect to a debtor who is a plan administrator of
an employee benefit plan.
Sec. 447. Appointment of committee of retired employees.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI--BANKRUPTCY DATA
Sec. 601. Improved bankruptcy statistics.
Sec. 602. Uniform rules for the collection of bankruptcy data.
Sec. 603. Audit procedures.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.
TITLE VII--BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and local
taxes.
Sec. 720. Dismissal for failure to timely file tax returns.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Other amendments to titles 11 and 28, United States Code.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
Sec. 901. Treatment of certain agreements by conservators or receivers
of insured depository institutions.
Sec. 902. Authority of the FDIC and NCUAB with respect to failed and
failing institutions.
Sec. 903. Amendments relating to transfers of qualified financial
contracts.
Sec. 904. Amendments relating to disaffirmance or repudiation of
qualified financial contracts.
Sec. 905. Clarifying amendment relating to master agreements.
Sec. 906. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 907. Bankruptcy law amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
Sec. 1004. Definition of family farmer.
Sec. 1005. Elimination of requirement that family farmer and spouse
receive over 50 percent of income from farming operation in
year prior to bankruptcy.
Sec. 1006. Prohibition of retroactive assessment of disposable income.
Sec. 1007. Family fishermen.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health
care business and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to automatic
stay.
TITLE XII--TECHNICAL AMENDMENTS
Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Bankruptcy cases and proceedings.
Sec. 1220. Knowing disregard of bankruptcy law or rule.
Sec. 1221. Transfers made by nonprofit charitable corporations.
Sec. 1222. Protection of valid purchase money security interests.
Sec. 1223. Bankruptcy Judgeships.
Sec. 1224. Compensating trustees.
Sec. 1225. Amendment to section 362 of title 11, United States Code.
Sec. 1226. Judicial education.
Sec. 1227. Reclamation.
Sec. 1228. Providing requested tax documents to the court.
Sec. 1229. Encouraging creditworthiness.
Sec. 1230. Property no longer subject to redemption.
Sec. 1231. Trustees.
Sec. 1232. Bankruptcy forms.
Sec. 1233. Direct appeals of bankruptcy matters to courts of appeals.
Sec. 1234. Involuntary cases.
Sec. 1235. Federal election law fines and penalties as nondischargeable
debt.
TITLE XIII--CONSUMER CREDIT DISCLOSURE
Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a
dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance
charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent
students.
Sec. 1309. Clarification of clear and conspicuous.
TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE
Sec. 1401. Employee wage and benefit priorities.
Sec. 1402. Fraudulent transfers and obligations.
Sec. 1403. Payment of insurance benefits to retired employees.
Sec. 1404. Debts nondischargeable if incurred in violation of securities
fraud laws.
Sec. 1405. Appointment of trustee in cases of suspected fraud.
Sec. 1406. Effective date; application of amendments.
TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1501. Effective date; application of amendments.
Sec. 1502. Technical corrections.
TITLE I--NEEDS-BASED BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended by
inserting ``or consents to'' after ``requests''.
SEC. 102. DISMISSAL OR CONVERSION.
(a) In General.--Section 707 of title 11, United States Code, is
amended--
(1) by striking the section heading and inserting the
following:
``Sec. 707. Dismissal of a case or conversion to a case under chapter
11 or 13'';
and
(2) in subsection (b)--
(A) by inserting ``(1)'' after ``(b)'';
(B) in paragraph (1), as so redesignated by subparagraph
(A) of this paragraph--
(i) in the first sentence--
(I) by striking ``but not at the request or
suggestion of'' and inserting ``trustee (or bankruptcy
administrator, if any), or'';
(II) by inserting ``, or, with the debtor's
consent, convert such a case to a case under chapter 11
or 13 of this title,'' after ``consumer debts''; and
(III) by striking ``a substantial abuse'' and
inserting ``an abuse''; and
(ii) by striking the next to last sentence; and
(C) by adding at the end the following:
``(2)(A)(i) In considering under paragraph (1) whether the granting
of relief would be an abuse of the provisions of this chapter, the
court shall presume abuse exists if the debtor's current monthly income
reduced by the amounts determined under clauses (ii), (iii), and (iv),
and multiplied by 60 is not less than the lesser of--
``(I) 25 percent of the debtor's nonpriority unsecured claims
in the case, or $6,000, whichever is greater; or
``(II) $10,000.
``(ii)(I) The debtor's monthly expenses shall be the debtor's
applicable monthly expense amounts specified under the National
Standards and Local Standards, and the debtor's actual monthly expenses
for the categories specified as Other Necessary Expenses issued by the
Internal Revenue Service for the area in which the debtor resides, as
in effect on the date of the order for relief, for the debtor, the
dependents of the debtor, and the spouse of the debtor in a joint case,
if the spouse is not otherwise a dependent. Such expenses shall include
reasonably necessary health insurance, disability insurance, and health
savings account expenses for the debtor, the spouse of the debtor, or
the dependents of the debtor. Notwithstanding any other provision of
this clause, the monthly expenses of the debtor shall not include any
payments for debts. In addition, the debtor's monthly expenses shall
include the debtor's reasonably necessary expenses incurred to maintain
the safety of the debtor and the family of the debtor from family
violence as identified under section 309 of the Family Violence
Prevention and Services Act, or other applicable Federal law. The
expenses included in the debtor's monthly expenses described in the
preceding sentence shall be kept confidential by the court. In
addition, if it is demonstrated that it is reasonable and necessary,
the debtor's monthly expenses may also include an additional allowance
for food and clothing of up to 5 percent of the food and clothing
categories as specified by the National Standards issued by the
Internal Revenue Service.
``(II) In addition, the debtor's monthly expenses may include, if
applicable, the continuation of actual expenses paid by the debtor that
are reasonable and necessary for care and support of an elderly,
chronically ill, or disabled household member or member of the debtor's
immediate family (including parents, grandparents, siblings, children,
and grandchildren of the debtor, the dependents of the debtor, and the
spouse of the debtor in a joint case who is not a dependent) and who is
unable to pay for such reasonable and necessary expenses.
``(III) In addition, for a debtor eligible for chapter 13, the
debtor's monthly expenses may include the actual administrative
expenses of administering a chapter 13 plan for the district in which
the debtor resides, up to an amount of 10 percent of the projected plan
payments, as determined under schedules issued by the Executive Office
for United States Trustees.
``(IV) In addition, the debtor's monthly expenses may include the
actual expenses for each dependent child less than 18 years of age, not
to exceed $1,500 per year per child, to attend a private or public
elementary or secondary school if the debtor provides documentation of
such expenses and a detailed explanation of why such expenses are
reasonable and necessary, and why such expenses are not already
accounted for in the National Standards, Local Standards, or Other
Necessary Expenses referred to in subclause (I).
``(V) In addition, the debtor's monthly expenses may include an
allowance for housing and utilities, in excess of the allowance
specified by the Local Standards for housing and utilities issued by
the Internal Revenue Service, based on the actual expenses for home
energy costs if the debtor provides documentation of such actual
expenses and demonstrates that such actual expenses are reasonable and
necessary.
``(iii) The debtor's average monthly payments on account of secured
debts shall be calculated as the sum of--
``(I) the total of all amounts scheduled as contractually due
to secured creditors in each month of the 60 months following the
date of the petition; and
``(II) any additional payments to secured creditors necessary
for the debtor, in filing a plan under chapter 13 of this title, to
maintain possession of the debtor's primary residence, motor
vehicle, or other property necessary for the support of the debtor
and the debtor's dependents, that serves as collateral for secured
debts;
divided by 60.
``(iv) The debtor's expenses for payment of all priority claims
(including priority child support and alimony claims) shall be
calculated as the total amount of debts entitled to priority, divided
by 60.
``(B)(i) In any proceeding brought under this subsection, the
presumption of abuse may only be rebutted by demonstrating special
circumstances, such as a serious medical condition or a call or order
to active duty in the Armed Forces, to the extent such special
circumstances that justify additional expenses or adjustments of
current monthly income for which there is no reasonable alternative.
``(ii) In order to establish special circumstances, the debtor
shall be required to itemize each additional expense or adjustment of
income and to provide--
``(I) documentation for such expense or adjustment to income;
and
``(II) a detailed explanation of the special circumstances that
make such expenses or adjustment to income necessary and
reasonable.
``(iii) The debtor shall attest under oath to the accuracy of any
information provided to demonstrate that additional expenses or
adjustments to income are required.
``(iv) The presumption of abuse may only be rebutted if the
additional expenses or adjustments to income referred to in clause (i)
cause the product of the debtor's current monthly income reduced by the
amounts determined under clauses (ii), (iii), and (iv) of subparagraph
(A) when multiplied by 60 to be less than the lesser of--
``(I) 25 percent of the debtor's nonpriority unsecured claims,
or $6,000, whichever is greater; or
``(II) $10,000.
``(C) As part of the schedule of current income and expenditures
required under section 521, the debtor shall include a statement of the
debtor's current monthly income, and the calculations that determine
whether a presumption arises under subparagraph (A)(i), that show how
each such amount is calculated.
``(D) Subparagraphs (A) through (C) shall not apply, and the court
may not dismiss or convert a case based on any form of means testing,
if the debtor is a disabled veteran (as defined in section 3741(1) of
title 38), and the indebtedness occurred primarily during a period
during which he or she was--
``(i) on active duty (as defined in section 101(d)(1) of title
10); or
``(ii) performing a homeland defense activity (as defined in
section 901(1) of title 32).
``(3) In considering under paragraph (1) whether the granting of
relief would be an abuse of the provisions of this chapter in a case in
which the presumption in subparagraph (A)(i) of such paragraph does not
arise or is rebutted, the court shall consider--
``(A) whether the debtor filed the petition in bad faith; or
``(B) the totality of the circumstances (including whether the
debtor seeks to reject a personal services contract and the
financial need for such rejection as sought by the debtor) of the
debtor's financial situation demonstrates abuse.
``(4)(A) The court, on its own initiative or on the motion of a
party in interest, in accordance with the procedures described in rule
9011 of the Federal Rules of Bankruptcy Procedure, may order the
attorney for the debtor to reimburse the trustee for all reasonable
costs in prosecuting a motion filed under section 707(b), including
reasonable attorneys' fees, if--
``(i) a trustee files a motion for dismissal or conversion
under this subsection; and
``(ii) the court--
``(I) grants such motion; and
``(II) finds that the action of the attorney for the debtor
in filing a case under this chapter violated rule 9011 of the
Federal Rules of Bankruptcy Procedure.
``(B) If the court finds that the attorney for the debtor violated
rule 9011 of the Federal Rules of Bankruptcy Procedure, the court, on
its own initiative or on the motion of a party in interest, in
accordance with such procedures, may order--
``(i) the assessment of an appropriate civil penalty against
the attorney for the debtor; and
``(ii) the payment of such civil penalty to the trustee, the
United States trustee (or the bankruptcy administrator, if any).
``(C) The signature of an attorney on a petition, pleading, or
written motion shall constitute a certification that the attorney has--
``(i) performed a reasonable investigation into the
circumstances that gave rise to the petition, pleading, or written
motion; and
``(ii) determined that the petition, pleading, or written
motion--
``(I) is well grounded in fact; and
``(II) is warranted by existing law or a good faith
argument for the extension, modification, or reversal of
existing law and does not constitute an abuse under paragraph
(1).
``(D) The signature of an attorney on the petition shall constitute
a certification that the attorney has no knowledge after an inquiry
that the information in the schedules filed with such petition is
incorrect.
``(5)(A) Except as provided in subparagraph (B) and subject to
paragraph (6), the court, on its own initiative or on the motion of a
party in interest, in accordance with the procedures described in rule
9011 of the Federal Rules of Bankruptcy Procedure, may award a debtor
all reasonable costs (including reasonable attorneys' fees) in
contesting a motion filed by a party in interest (other than a trustee
or United States trustee (or bankruptcy administrator, if any)) under
this subsection if--
``(i) the court does not grant the motion; and
``(ii) the court finds that--
``(I) the position of the party that filed the motion
violated rule 9011 of the Federal Rules of Bankruptcy
Procedure; or
``(II) the attorney (if any) who filed the motion did not
comply with the requirements of clauses (i) and (ii) of
paragraph (4)(C), and the motion was made solely for the
purpose of coercing a debtor into waiving a right guaranteed to
the debtor under this title.
``(B) A small business that has a claim of an aggregate amount less
than $1,000 shall not be subject to subparagraph (A)(ii)(I).
``(C) For purposes of this paragraph--
``(i) the term `small business' means an unincorporated
business, partnership, corporation, association, or organization
that--
``(I) has fewer than 25 full-time employees as determined
on the date on which the motion is filed; and
``(II) is engaged in commercial or business activity; and
``(ii) the number of employees of a wholly owned subsidiary of
a corporation includes the employees of--
``(I) a parent corporation; and
``(II) any other subsidiary corporation of the parent
corporation.
``(6) Only the judge or United States trustee (or bankruptcy
administrator, if any) may file a motion under section 707(b), if the
current monthly income of the debtor, or in a joint case, the debtor
and the debtor's spouse, as of the date of the order for relief, when
multiplied by 12, is equal to or less than--
``(A) in the case of a debtor in a household of 1 person, the
median family income of the applicable State for 1 earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the applicable
State for a family of the same number or fewer individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the applicable
State for a family of 4 or fewer individuals, plus $525 per month
for each individual in excess of 4.
``(7)(A) No judge, United States trustee (or bankruptcy
administrator, if any), trustee, or other party in interest may file a
motion under paragraph (2) if the current monthly income of the debtor,
including a veteran (as that term is defined in section 101 of title
38), and the debtor's spouse combined, as of the date of the order for
relief when multiplied by 12, is equal to or less than--
``(i) in the case of a debtor in a household of 1 person, the
median family income of the applicable State for 1 earner;
``(ii) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the applicable
State for a family of the same number or fewer individuals; or
``(iii) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the applicable
State for a family of 4 or fewer individuals, plus $525 per month
for each individual in excess of 4.
``(B) In a case that is not a joint case, current monthly income of
the debtor's spouse shall not be considered for purposes of
subparagraph (A) if--
``(i)(I) the debtor and the debtor's spouse are separated under
applicable nonbankruptcy law; or
``(II) the debtor and the debtor's spouse are living separate
and apart, other than for the purpose of evading subparagraph (A);
and
``(ii) the debtor files a statement under penalty of perjury--
``(I) specifying that the debtor meets the requirement of
subclause (I) or (II) of clause (i); and
``(II) disclosing the aggregate, or best estimate of the
aggregate, amount of any cash or money payments received from
the debtor's spouse attributed to the debtor's current monthly
income.''.
(b) Definition.--Section 101 of title 11, United States Code, is
amended by inserting after paragraph (10) the following:
``(10A) `current monthly income'--
``(A) means the average monthly income from all sources
that the debtor receives (or in a joint case the debtor and the
debtor's spouse receive) without regard to whether such income
is taxable income, derived during the 6-month period ending
on--
``(i) the last day of the calendar month immediately
preceding the date of the commencement of the case if the
debtor files the schedule of current income required by
section 521(a)(1)(B)(ii); or
``(ii) the date on which current income is determined
by the court for purposes of this title if the debtor does
not file the schedule of current income required by section
521(a)(1)(B)(ii); and
``(B) includes any amount paid by any entity other than the
debtor (or in a joint case the debtor and the debtor's spouse),
on a regular basis for the household expenses of the debtor or
the debtor's dependents (and in a joint case the debtor's
spouse if not otherwise a dependent), but excludes benefits
received under the Social Security Act, payments to victims of
war crimes or crimes against humanity on account of their
status as victims of such crimes, and payments to victims of
international terrorism (as defined in section 2331 of title
18) or domestic terrorism (as defined in section 2331 of title
18) on account of their status as victims of such terrorism;''.
(c) United States Trustee and Bankruptcy Administrator Duties.--
Section 704 of title 11, United States Code, is amended--
(1) by inserting ``(a)'' before ``The trustee shall--''; and
(2) by adding at the end the following:
``(b)(1) With respect to a debtor who is an individual in a case
under this chapter--
``(A) the United States trustee (or the bankruptcy
administrator, if any) shall review all materials filed by the
debtor and, not later than 10 days after the date of the first
meeting of creditors, file with the court a statement as to whether
the debtor's case would be presumed to be an abuse under section
707(b); and
``(B) not later than 5 days after receiving a statement under
subparagraph (A), the court shall provide a copy of the statement
to all creditors.
``(2) The United States trustee (or bankruptcy administrator, if
any) shall, not later than 30 days after the date of filing a statement
under paragraph (1), either file a motion to dismiss or convert under
section 707(b) or file a statement setting forth the reasons the United
States trustee (or the bankruptcy administrator, if any) does not
consider such a motion to be appropriate, if the United States trustee
(or the bankruptcy administrator, if any) determines that the debtor's
case should be presumed to be an abuse under section 707(b) and the
product of the debtor's current monthly income, multiplied by 12 is not
less than--
``(A) in the case of a debtor in a household of 1 person, the
median family income of the applicable State for 1 earner; or
``(B) in the case of a debtor in a household of 2 or more
individuals, the highest median family income of the applicable
State for a family of the same number or fewer individuals.''.
(d) Notice.--Section 342 of title 11, United States Code, is
amended by adding at the end the following:
``(d) In a case under chapter 7 of this title in which the debtor
is an individual and in which the presumption of abuse arises under
section 707(b), the clerk shall give written notice to all creditors
not later than 10 days after the date of the filing of the petition
that the presumption of abuse has arisen.''.
(e) Nonlimitation of Information.--Nothing in this title shall
limit the ability of a creditor to provide information to a judge
(except for information communicated ex parte, unless otherwise
permitted by applicable law), United States trustee (or bankruptcy
administrator, if any), or trustee.
(f) Dismissal for Certain Crimes.--Section 707 of title 11, United
States Code, is amended by adding at the end the following:
``(c)(1) In this subsection--
``(A) the term `crime of violence' has the meaning given such
term in section 16 of title 18; and
``(B) the term `drug trafficking crime' has the meaning given
such term in section 924(c)(2) of title 18.
``(2) Except as provided in paragraph (3), after notice and a
hearing, the court, on a motion by the victim of a crime of violence or
a drug trafficking crime, may when it is in the best interest of the
victim dismiss a voluntary case filed under this chapter by a debtor
who is an individual if such individual was convicted of such crime.
``(3) The court may not dismiss a case under paragraph (2) if the
debtor establishes by a preponderance of the evidence that the filing
of a case under this chapter is necessary to satisfy a claim for a
domestic support obligation.''.
(g) Confirmation of Plan.--Section 1325(a) of title 11, United
States Code, is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period and inserting a
semicolon; and
(3) by inserting after paragraph (6) the following:
``(7) the action of the debtor in filing the petition was in
good faith;''.
(h) Applicability of Means Test to Chapter 13.--Section 1325(b) of
title 11, United States Code, is amended--
(1) in paragraph (1)(B), by inserting ``to unsecured
creditors'' after ``to make payments''; and
(2) by striking paragraph (2) and inserting the following:
``(2) For purposes of this subsection, the term `disposable
income' means current monthly income received by the debtor (other
than child support payments, foster care payments, or disability
payments for a dependent child made in accordance with applicable
nonbankruptcy law to the extent reasonably necessary to be expended
for such child) less amounts reasonably necessary to be expended--
``(A)(i) for the maintenance or support of the debtor or a
dependent of the debtor, or for a domestic support obligation,
that first becomes payable after the date the petition is
filed; and
``(ii) for charitable contributions (that meet the
definition of `charitable contribution' under section 548(d)(3)
to a qualified religious or charitable entity or organization
(as defined in section 548(d)(4)) in an amount not to exceed 15
percent of gross income of the debtor for the year in which the
contributions are made; and
``(B) if the debtor is engaged in business, for the payment
of expenditures necessary for the continuation, preservation,
and operation of such business.
``(3) Amounts reasonably necessary to be expended under
paragraph (2) shall be determined in accordance with subparagraphs
(A) and (B) of section 707(b)(2), if the debtor has current monthly
income, when multiplied by 12, greater than--
``(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1 earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the applicable
State for a family of the same number or fewer individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the applicable
State for a family of 4 or fewer individuals, plus $525 per
month for each individual in excess of 4.''.
(i) Special Allowance for Health Insurance.--Section 1329(a) of
title 11, United States Code, is amended--
(1) in paragraph (2) by striking ``or'' at the end;
(2) in paragraph (3) by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) reduce amounts to be paid under the plan by the actual
amount expended by the debtor to purchase health insurance for the
debtor (and for any dependent of the debtor if such dependent does
not otherwise have health insurance coverage) if the debtor
documents the cost of such insurance and demonstrates that--
``(A) such expenses are reasonable and necessary;
``(B)(i) if the debtor previously paid for health
insurance, the amount is not materially larger than the cost
the debtor previously paid or the cost necessary to maintain
the lapsed policy; or
``(ii) if the debtor did not have health insurance, the
amount is not materially larger than the reasonable cost that
would be incurred by a debtor who purchases health insurance,
who has similar income, expenses, age, and health status, and
who lives in the same geographical location with the same
number of dependents who do not otherwise have health insurance
coverage; and
``(C) the amount is not otherwise allowed for purposes of
determining disposable income under section 1325(b) of this
title;
and upon request of any party in interest, files proof that a
health insurance policy was purchased.''.
(j) Adjustment of Dollar Amounts.--Section 104(b) of title 11,
United States Code, is amended by striking ``and 523(a)(2)(C)'' each
place it appears and inserting ``523(a)(2)(C), 707(b), and
1325(b)(3)''.
(k) Definition of `Median Family Income'.--Section 101 of title 11,
United States Code, is amended by inserting after paragraph (39) the
following:
``(39A) `median family income' means for any year--
``(A) the median family income both calculated and reported
by the Bureau of the Census in the then most recent year; and
``(B) if not so calculated and reported in the then current
year, adjusted annually after such most recent year until the
next year in which median family income is both calculated and
reported by the Bureau of the Census, to reflect the percentage
change in the Consumer Price Index for All Urban Consumers
during the period of years occurring after such most recent
year and before such current year;''.
(k) Clerical Amendment.--The table of sections for chapter 7 of
title 11, United States Code, is amended by striking the item relating
to section 707 and inserting the following:
``707. Dismissal of a case or conversion to a case under chapter 11 or
13.''.
SEC. 103. SENSE OF CONGRESS AND STUDY.
(a) Sense of Congress.--It is the sense of Congress that the
Secretary of the Treasury has the authority to alter the Internal
Revenue Service standards established to set guidelines for repayment
plans as needed to accommodate their use under section 707(b) of title
11, United States Code.
(b) Study.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Director of the Executive Office for
United States Trustees shall submit a report to the Committee on
the Judiciary of the Senate and the Committee on the Judiciary of
the House of Representatives containing the findings of the
Director regarding the utilization of Internal Revenue Service
standards for determining--
(A) the current monthly expenses of a debtor under section
707(b) of title 11, United States Code; and
(B) the impact that the application of such standards has
had on debtors and on the bankruptcy courts.
(2) Recommendation.--The report under paragraph (1) may include
recommendations for amendments to title 11, United States Code,
that are consistent with the findings of the Director under
paragraph (1).
SEC. 104. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is amended to read
as follows:
``(b) Before the commencement of a case under this title by an
individual whose debts are primarily consumer debts, the clerk shall
give to such individual written notice containing--
``(1) a brief description of--
``(A) chapters 7, 11, 12, and 13 and the general purpose,
benefits, and costs of proceeding under each of those chapters;
and
``(B) the types of services available from credit
counseling agencies; and
``(2) statements specifying that--
``(A) a person who knowingly and fraudulently conceals
assets or makes a false oath or statement under penalty of
perjury in connection with a case under this title shall be
subject to fine, imprisonment, or both; and
``(B) all information supplied by a debtor in connection
with a case under this title is subject to examination by the
Attorney General.''.
SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.
(a) Development of Financial Management and Training Curriculum and
Materials.--The Director of the Executive Office for United States
Trustees (in this section referred to as the ``Director'') shall
consult with a wide range of individuals who are experts in the field
of debtor education, including trustees who serve in cases under
chapter 13 of title 11, United States Code, and who operate financial
management education programs for debtors, and shall develop a
financial management training curriculum and materials that can be used
to educate debtors who are individuals on how to better manage their
finances.
(b) Test.--
(1) Selection of districts.--The Director shall select 6
judicial districts of the United States in which to test the
effectiveness of the financial management training curriculum and
materials developed under subsection (a).
(2) Use.--For an 18-month period beginning not later than 270
days after the date of the enactment of this Act, such curriculum
and materials shall be, for the 6 judicial districts selected under
paragraph (1), used as the instructional course concerning personal
financial management for purposes of section 111 of title 11,
United States Code.
(c) Evaluation.--
(1) In general.--During the 18-month period referred to in
subsection (b), the Director shall evaluate the effectiveness of--
(A) the financial management training curriculum and
materials developed under subsection (a); and
(B) a sample of existing consumer education programs such
as those described in the Report of the National Bankruptcy
Review Commission (October 20, 1997) that are representative of
consumer education programs carried out by the credit industry,
by trustees serving under chapter 13 of title 11, United States
Code, and by consumer counseling groups.
(2) Report.--Not later than 3 months after concluding such
evaluation, the Director shall submit a report to the Speaker of
the House of Representatives and the President pro tempore of the
Senate, for referral to the appropriate committees of the Congress,
containing the findings of the Director regarding the effectiveness
of such curriculum, such materials, and such programs and their
costs.
SEC. 106. CREDIT COUNSELING.
(a) Who May Be a Debtor.--Section 109 of title 11, United States
Code, is amended by adding at the end the following:
``(h)(1) Subject to paragraphs (2) and (3), and notwithstanding any
other provision of this section, an individual may not be a debtor
under this title unless such individual has, during the 180-day period
preceding the date of filing of the petition by such individual,
received from an approved nonprofit budget and credit counseling agency
described in section 111(a) an individual or group briefing (including
a briefing conducted by telephone or on the Internet) that outlined the
opportunities for available credit counseling and assisted such
individual in performing a related budget analysis.
``(2)(A) Paragraph (1) shall not apply with respect to a debtor who
resides in a district for which the United States trustee (or the
bankruptcy administrator, if any) determines that the approved
nonprofit budget and credit counseling agencies for such district are
not reasonably able to provide adequate services to the additional
individuals who would otherwise seek credit counseling from such
agencies by reason of the requirements of paragraph (1).
``(B) The United States trustee (or the bankruptcy administrator,
if any) who makes a determination described in subparagraph (A) shall
review such determination not later than 1 year after the date of such
determination, and not less frequently than annually thereafter.
Notwithstanding the preceding sentence, a nonprofit budget and credit
counseling agency may be disapproved by the United States trustee (or
the bankruptcy administrator, if any) at any time.
``(3)(A) Subject to subparagraph (B), the requirements of paragraph
(1) shall not apply with respect to a debtor who submits to the court a
certification that--
``(i) describes exigent circumstances that merit a waiver of
the requirements of paragraph (1);
``(ii) states that the debtor requested credit counseling
services from an approved nonprofit budget and credit counseling
agency, but was unable to obtain the services referred to in
paragraph (1) during the 5-day period beginning on the date on
which the debtor made that request; and
``(iii) is satisfactory to the court.
``(B) With respect to a debtor, an exemption under subparagraph (A)
shall cease to apply to that debtor on the date on which the debtor
meets the requirements of paragraph (1), but in no case may the
exemption apply to that debtor after the date that is 30 days after the
debtor files a petition, except that the court, for cause, may order an
additional 15 days.
``(4) The requirements of paragraph (1) shall not apply with
respect to a debtor whom the court determines, after notice and
hearing, is unable to complete those requirements because of
incapacity, disability, or active military duty in a military combat
zone. For the purposes of this paragraph, incapacity means that the
debtor is impaired by reason of mental illness or mental deficiency so
that he is incapable of realizing and making rational decisions with
respect to his financial responsibilities; and ``disability'' means
that the debtor is so physically impaired as to be unable, after
reasonable effort, to participate in an in person, telephone, or
Internet briefing required under paragraph (1).''.
(b) Chapter 7 Discharge.--Section 727(a) of title 11, United States
Code, is amended--
(1) in paragraph (9), by striking ``or'' at the end;
(2) in paragraph (10), by striking the period and inserting ``;
or''; and
(3) by adding at the end the following:
``(11) after filing the petition, the debtor failed to complete
an instructional course concerning personal financial management
described in section 111, except that this paragraph shall not
apply with respect to a debtor who is a person described in section
109(h)(4) or who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines that
the approved instructional courses are not adequate to service the
additional individuals who would otherwise be required to complete
such instructional courses under this section (The United States
trustee (or the bankruptcy administrator, if any) who makes a
determination described in this paragraph shall review such
determination not later than 1 year after the date of such
determination, and not less frequently than annually
thereafter.).''.
(c) Chapter 13 Discharge.--Section 1328 of title 11, United States
Code, is amended by adding at the end the following:
``(g)(1) The court shall not grant a discharge under this section
to a debtor unless after filing a petition the debtor has completed an
instructional course concerning personal financial management described
in section 111.
``(2) Paragraph (1) shall not apply with respect to a debtor who is
a person described in section 109(h)(4) or who resides in a district
for which the United States trustee (or the bankruptcy administrator,
if any) determines that the approved instructional courses are not
adequate to service the additional individuals who would otherwise be
required to complete such instructional course by reason of the
requirements of paragraph (1).
``(3) The United States trustee (or the bankruptcy administrator,
if any) who makes a determination described in paragraph (2) shall
review such determination not later than 1 year after the date of such
determination, and not less frequently than annually thereafter.''.
(d) Debtor's Duties.--Section 521 of title 11, United States Code,
is amended--
(1) by inserting ``(a)'' before ``The debtor shall--''; and
(2) by adding at the end the following:
``(b) In addition to the requirements under subsection (a), a
debtor who is an individual shall file with the court--
``(1) a certificate from the approved nonprofit budget and
credit counseling agency that provided the debtor services under
section 109(h) describing the services provided to the debtor; and
``(2) a copy of the debt repayment plan, if any, developed
under section 109(h) through the approved nonprofit budget and
credit counseling agency referred to in paragraph (1).''.
(e) General Provisions.--
(1) In general.--Chapter 1 of title 11, United States Code, is
amended by adding at the end the following:
``Sec. 111. Nonprofit budget and credit counseling agencies; financial
management instructional courses
``(a) The clerk shall maintain a publicly available list of--
``(1) nonprofit budget and credit counseling agencies that
provide 1 or more services described in section 109(h) currently
approved by the United States trustee (or the bankruptcy
administrator, if any); and
``(2) instructional courses concerning personal financial
management currently approved by the United States trustee (or the
bankruptcy administrator, if any), as applicable.
``(b) The United States trustee (or bankruptcy administrator, if
any) shall only approve a nonprofit budget and credit counseling agency
or an instructional course concerning personal financial management as
follows:
``(1) The United States trustee (or bankruptcy administrator,
if any) shall have thoroughly reviewed the qualifications of the
nonprofit budget and credit counseling agency or of the provider of
the instructional course under the standards set forth in this
section, and the services or instructional courses that will be
offered by such agency or such provider, and may require such
agency or such provider that has sought approval to provide
information with respect to such review.
``(2) The United States trustee (or bankruptcy administrator,
if any) shall have determined that such agency or such
instructional course fully satisfies the applicable standards set
forth in this section.
``(3) If a nonprofit budget and credit counseling agency or
instructional course did not appear on the approved list for the
district under subsection (a) immediately before approval under
this section, approval under this subsection of such agency or such
instructional course shall be for a probationary period not to
exceed 6 months.
``(4) At the conclusion of the applicable probationary period
under paragraph (3), the United States trustee (or bankruptcy
administrator, if any) may only approve for an additional 1-year
period, and for successive 1-year periods thereafter, an agency or
instructional course that has demonstrated during the probationary
or applicable subsequent period of approval that such agency or
instructional course--
``(A) has met the standards set forth under this section
during such period; and
``(B) can satisfy such standards in the future.
``(5) Not later than 30 days after any final decision under
paragraph (4), an interested person may seek judicial review of
such decision in the appropriate district court of the United
States.
``(c)(1) The United States trustee (or the bankruptcy
administrator, if any) shall only approve a nonprofit budget and credit
counseling agency that demonstrates that it will provide qualified
counselors, maintain adequate provision for safekeeping and payment of
client funds, provide adequate counseling with respect to client credit
problems, and deal responsibly and effectively with other matters
relating to the quality, effectiveness, and financial security of the
services it provides.
``(2) To be approved by the United States trustee (or the
bankruptcy administrator, if any), a nonprofit budget and credit
counseling agency shall, at a minimum--
``(A) have a board of directors the majority of which--
``(i) are not employed by such agency; and
``(ii) will not directly or indirectly benefit financially
from the outcome of the counseling services provided by such
agency;
``(B) if a fee is charged for counseling services, charge a
reasonable fee, and provide services without regard to ability to
pay the fee;
``(C) provide for safekeeping and payment of client funds,
including an annual audit of the trust accounts and appropriate
employee bonding;
``(D) provide full disclosures to a client, including funding
sources, counselor qualifications, possible impact on credit
reports, and any costs of such program that will be paid by such
client and how such costs will be paid;
``(E) provide adequate counseling with respect to a client's
credit problems that includes an analysis of such client's current
financial condition, factors that caused such financial condition,
and how such client can develop a plan to respond to the problems
without incurring negative amortization of debt;
``(F) provide trained counselors who receive no commissions or
bonuses based on the outcome of the counseling services provided by
such agency, and who have adequate experience, and have been
adequately trained to provide counseling services to individuals in
financial difficulty, including the matters described in
subparagraph (E);
``(G) demonstrate adequate experience and background in
providing credit counseling; and
``(H) have adequate financial resources to provide continuing
support services for budgeting plans over the life of any repayment
plan.
``(d) The United States trustee (or the bankruptcy administrator,
if any) shall only approve an instructional course concerning personal
financial management--
``(1) for an initial probationary period under subsection
(b)(3) if the course will provide at a minimum--
``(A) trained personnel with adequate experience and
training in providing effective instruction and services;
``(B) learning materials and teaching methodologies
designed to assist debtors in understanding personal financial
management and that are consistent with stated objectives
directly related to the goals of such instructional course;
``(C) adequate facilities situated in reasonably convenient
locations at which such instructional course is offered, except
that such facilities may include the provision of such
instructional course by telephone or through the Internet, if
such instructional course is effective;
``(D) the preparation and retention of reasonable records
(which shall include the debtor's bankruptcy case number) to
permit evaluation of the effectiveness of such instructional
course, including any evaluation of satisfaction of
instructional course requirements for each debtor attending
such instructional course, which shall be available for
inspection and evaluation by the Executive Office for United
States Trustees, the United States trustee (or the bankruptcy
administrator, if any), or the chief bankruptcy judge for the
district in which such instructional course is offered; and
``(E) if a fee is charged for the instructional course, charge
a reasonable fee, and provide services without regard to ability to
pay the fee.
``(2) for any 1-year period if the provider thereof has
demonstrated that the course meets the standards of paragraph (1)
and, in addition--
``(A) has been effective in assisting a substantial number
of debtors to understand personal financial management; and
``(B) is otherwise likely to increase substantially the
debtor's understanding of personal financial management.
``(e) The district court may, at any time, investigate the
qualifications of a nonprofit budget and credit counseling agency
referred to in subsection (a), and request production of documents to
ensure the integrity and effectiveness of such agency. The district
court may, at any time, remove from the approved list under subsection
(a) a nonprofit budget and credit counseling agency upon finding such
agency does not meet the qualifications of subsection (b).
``(f) The United States trustee (or the bankruptcy administrator,
if any) shall notify the clerk that a nonprofit budget and credit
counseling agency or an instructional course is no longer approved, in
which case the clerk shall remove it from the list maintained under
subsection (a).
``(g)(1) No nonprofit budget and credit counseling agency may
provide to a credit reporting agency information concerning whether a
debtor has received or sought instruction concerning personal financial
management from such agency.
``(2) A nonprofit budget and credit counseling agency that
willfully or negligently fails to comply with any requirement under
this title with respect to a debtor shall be liable for damages in an
amount equal to the sum of--
``(A) any actual damages sustained by the debtor as a result of
the violation; and
``(B) any court costs or reasonable attorneys' fees (as
determined by the court) incurred in an action to recover those
damages.''.
(2) Clerical amendment.--The table of sections for chapter 1 of
title 11, United States Code, is amended by adding at the end the
following:
``111. Nonprofit budget and credit counseling agencies; financial
management instructional courses.''.
(f) Limitation.--Section 362 of title 11, United States Code, is
amended by adding at the end the following:
``(i) If a case commenced under chapter 7, 11, or 13 is dismissed
due to the creation of a debt repayment plan, for purposes of
subsection (c)(3), any subsequent case commenced by the debtor under
any such chapter shall not be presumed to be filed not in good faith.
``(j) On request of a party in interest, the court shall issue an
order under subsection (c) confirming that the automatic stay has been
terminated.''.
SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.
For purposes of section 707(b) of title 11, United States Code, as
amended by this Act, the Director of the Executive Office for United
States Trustees shall, not later than 180 days after the date of
enactment of this Act, issue schedules of reasonable and necessary
administrative expenses of administering a chapter 13 plan for each
judicial district of the United States.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.
(a) Reduction of Claim.--Section 502 of title 11, United States
Code, is amended by adding at the end the following:
``(k)(1) The court, on the motion of the debtor and after a
hearing, may reduce a claim filed under this section based in whole on
an unsecured consumer debt by not more than 20 percent of the claim,
if--
``(A) the claim was filed by a creditor who unreasonably
refused to negotiate a reasonable alternative repayment schedule
proposed on behalf of the debtor by an approved nonprofit budget
and credit counseling agency described in section 111;
``(B) the offer of the debtor under subparagraph (A)--
``(i) was made at least 60 days before the date of the
filing of the petition; and
``(ii) provided for payment of at least 60 percent of the
amount of the debt over a period not to exceed the repayment
period of the loan, or a reasonable extension thereof; and
``(C) no part of the debt under the alternative repayment
schedule is nondischargeable.
``(2) The debtor shall have the burden of proving, by clear and
convincing evidence, that--
``(A) the creditor unreasonably refused to consider the
debtor's proposal; and
``(B) the proposed alternative repayment schedule was made
prior to expiration of the 60-day period specified in paragraph
(1)(B)(i).''.
(b) Limitation on Avoidability.--Section 547 of title 11, United
States Code, is amended by adding at the end the following:
``(h) The trustee may not avoid a transfer if such transfer was
made as a part of an alternative repayment schedule between the debtor
and any creditor of the debtor created by an approved nonprofit budget
and credit counseling agency.''.
SEC. 202. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by adding
at the end the following:
``(i) The willful failure of a creditor to credit payments received
under a plan confirmed under this title, unless the order confirming
the plan is revoked, the plan is in default, or the creditor has not
received payments required to be made under the plan in the manner
required by the plan (including crediting the amounts required under
the plan), shall constitute a violation of an injunction under
subsection (a)(2) if the act of the creditor to collect and failure to
credit payments in the manner required by the plan caused material
injury to the debtor.
``(j) Subsection (a)(2) does not operate as an injunction against
an act by a creditor that is the holder of a secured claim, if--
``(1) such creditor retains a security interest in real
property that is the principal residence of the debtor;
``(2) such act is in the ordinary course of business between
the creditor and the debtor; and
``(3) such act is limited to seeking or obtaining periodic
payments associated with a valid security interest in lieu of
pursuit of in rem relief to enforce the lien.''.
SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION AGREEMENT PRACTICES.
(a) In General.--Section 524 of title 11, United States Code, as
amended section 202, is amended--
(1) in subsection (c), by striking paragraph (2) and inserting
the following:
``(2) the debtor received the disclosures described in
subsection (k) at or before the time at which the debtor signed the
agreement;''; and
(2) by adding at the end the following:
``(k)(1) The disclosures required under subsection (c)(2) shall
consist of the disclosure statement described in paragraph (3),
completed as required in that paragraph, together with the agreement
specified in subsection (c), statement, declaration, motion and order
described, respectively, in paragraphs (4) through (8), and shall be
the only disclosures required in connection with entering into such
agreement.
``(2) Disclosures made under paragraph (1) shall be made clearly
and conspicuously and in writing. The terms `Amount Reaffirmed' and
`Annual Percentage Rate' shall be disclosed more conspicuously than
other terms, data or information provided in connection with this
disclosure, except that the phrases `Before agreeing to reaffirm a
debt, review these important disclosures' and `Summary of Reaffirmation
Agreement' may be equally conspicuous. Disclosures may be made in a
different order and may use terminology different from that set forth
in paragraphs (2) through (8), except that the terms `Amount
Reaffirmed' and `Annual Percentage Rate' must be used where indicated.
``(3) The disclosure statement required under this paragraph shall
consist of the following:
``(A) The statement: `Part A: Before agreeing to reaffirm a
debt, review these important disclosures:';
``(B) Under the heading `Summary of Reaffirmation Agreement',
the statement: `This Summary is made pursuant to the requirements
of the Bankruptcy Code';
``(C) The `Amount Reaffirmed', using that term, which shall
be--
``(i) the total amount of debt that the debtor agrees to
reaffirm by entering into an agreement of the kind specified in
subsection (c), and
``(ii) the total of any fees and costs accrued as of the
date of the disclosure statement, related to such total amount.
``(D) In conjunction with the disclosure of the `Amount
Reaffirmed', the statements--
``(i) `The amount of debt you have agreed to reaffirm'; and
``(ii) `Your credit agreement may obligate you to pay
additional amounts which may come due after the date of this
disclosure. Consult your credit agreement.'.
``(E) The `Annual Percentage Rate', using that term, which
shall be disclosed as--
``(i) if, at the time the petition is filed, the debt is an
extension of credit under an open end credit plan, as the terms
`credit' and `open end credit plan' are defined in section 103
of the Truth in Lending Act, then--
``(I) the annual percentage rate determined under
paragraphs (5) and (6) of section 127(b) of the Truth in
Lending Act, as applicable, as disclosed to the debtor in
the most recent periodic statement prior to entering into
an agreement of the kind specified in subsection (c) or, if
no such periodic statement has been given to the debtor
during the prior 6 months, the annual percentage rate as it
would have been so disclosed at the time the disclosure
statement is given to the debtor, or to the extent this
annual percentage rate is not readily available or not
applicable, then
``(II) the simple interest rate applicable to the
amount reaffirmed as of the date the disclosure statement
is given to the debtor, or if different simple interest
rates apply to different balances, the simple interest rate
applicable to each such balance, identifying the amount of
each such balance included in the amount reaffirmed, or
``(III) if the entity making the disclosure elects, to
disclose the annual percentage rate under subclause (I) and
the simple interest rate under subclause (II); or
``(ii) if, at the time the petition is filed, the debt is
an extension of credit other than under an open end credit
plan, as the terms `credit' and `open end credit plan' are
defined in section 103 of the Truth in Lending Act, then--
``(I) the annual percentage rate under section
128(a)(4) of the Truth in Lending Act, as disclosed to the
debtor in the most recent disclosure statement given to the
debtor prior to the entering into an agreement of the kind
specified in subsection (c) with respect to the debt, or,
if no such disclosure statement was given to the debtor,
the annual percentage rate as it would have been so
disclosed at the time the disclosure statement is given to
the debtor, or to the extent this annual percentage rate is
not readily available or not applicable, then
``(II) the simple interest rate applicable to the
amount reaffirmed as of the date the disclosure statement
is given to the debtor, or if different simple interest
rates apply to different balances, the simple interest rate
applicable to each such balance, identifying the amount of
such balance included in the amount reaffirmed, or
``(III) if the entity making the disclosure elects, to
disclose the annual percentage rate under (I) and the
simple interest rate under (II).
``(F) If the underlying debt transaction was disclosed as a
variable rate transaction on the most recent disclosure given under
the Truth in Lending Act, by stating `The interest rate on your
loan may be a variable interest rate which changes from time to
time, so that the annual percentage rate disclosed here may be
higher or lower.'.
``(G) If the debt is secured by a security interest which has
not been waived in whole or in part or determined to be void by a
final order of the court at the time of the disclosure, by
disclosing that a security interest or lien in goods or property is
asserted over some or all of the debts the debtor is reaffirming
and listing the items and their original purchase price that are
subject to the asserted security interest, or if not a purchase-
money security interest then listing by items or types and the
original amount of the loan.
``(H) At the election of the creditor, a statement of the
repayment schedule using 1 or a combination of the following--
``(i) by making the statement: `Your first payment in the
amount of $___ is due on ___ but the future payment amount may
be different. Consult your reaffirmation agreement or credit
agreement, as applicable.', and stating the amount of the first
payment and the due date of that payment in the places
provided;
``(ii) by making the statement: `Your payment schedule will
be:', and describing the repayment schedule with the number,
amount, and due dates or period of payments scheduled to repay
the debts reaffirmed to the extent then known by the disclosing
party; or
``(iii) by describing the debtor's repayment obligations
with reasonable specificity to the extent then known by the
disclosing party.
``(I) The following statement: `Note: When this disclosure
refers to what a creditor ``may'' do, it does not use the word
``may'' to give the creditor specific permission. The word ``may''
is used to tell you what might occur if the law permits the
creditor to take the action. If you have questions about your
reaffirming a debt or what the law requires, consult with the
attorney who helped you negotiate this agreement reaffirming a
debt. If you don't have an attorney helping you, the judge will
explain the effect of your reaffirming a debt when the hearing on
the reaffirmation agreement is held.'.
``(J)(i) The following additional statements:
```Reaffirming a debt is a serious financial decision. The law
requires you to take certain steps to make sure the decision is in your
best interest. If these steps are not completed, the reaffirmation
agreement is not effective, even though you have signed it.
```1. Read the disclosures in this Part A carefully. Consider
the decision to reaffirm carefully. Then, if you want to reaffirm,
sign the reaffirmation agreement in Part B (or you may use a
separate agreement you and your creditor agree on).
```2. Complete and sign Part D and be sure you can afford to
make the payments you are agreeing to make and have received a copy
of the disclosure statement and a completed and signed
reaffirmation agreement.
```3. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, the attorney must have
signed the certification in Part C.
```4. If you were not represented by an attorney during the
negotiation of your reaffirmation agreement, you must have
completed and signed Part E.
```5. The original of this disclosure must be filed with the
court by you or your creditor. If a separate reaffirmation
agreement (other than the one in Part B) has been signed, it must
be attached.
```6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court unless the
reaffirmation is presumed to be an undue hardship as explained in
Part D.
```7. If you were not represented by an attorney during the
negotiation of your reaffirmation agreement, it will not be
effective unless the court approves it. The court will notify you
of the hearing on your reaffirmation agreement. You must attend
this hearing in bankruptcy court where the judge will review your
reaffirmation agreement. The bankruptcy court must approve your
reaffirmation agreement as consistent with your best interests,
except that no court approval is required if your reaffirmation
agreement is for a consumer debt secured by a mortgage, deed of
trust, security deed, or other lien on your real property, like
your home.
```Your right to rescind (cancel) your reaffirmation agreement. You
may rescind (cancel) your reaffirmation agreement at any time before
the bankruptcy court enters a discharge order, or before the expiration
of the 60-day period that begins on the date your reaffirmation
agreement is filed with the court, whichever occurs later. To rescind
(cancel) your reaffirmation agreement, you must notify the creditor
that your reaffirmation agreement is rescinded (or canceled).
```What are your obligations if you reaffirm the debt? A reaffirmed
debt remains your personal legal obligation. It is not discharged in
your bankruptcy case. That means that if you default on your reaffirmed
debt after your bankruptcy case is over, your creditor may be able to
take your property or your wages. Otherwise, your obligations will be
determined by the reaffirmation agreement which may have changed the
terms of the original agreement. For example, if you are reaffirming an
open end credit agreement, the creditor may be permitted by that
agreement or applicable law to change the terms of that agreement in
the future under certain conditions.
```Are you required to enter into a reaffirmation agreement by any
law? No, you are not required to reaffirm a debt by any law. Only agree
to reaffirm a debt if it is in your best interest. Be sure you can
afford the payments you agree to make.
```What if your creditor has a security interest or lien? Your
bankruptcy discharge does not eliminate any lien on your property. A
``lien'' is often referred to as a security interest, deed of trust,
mortgage or security deed. Even if you do not reaffirm and your
personal liability on the debt is discharged, because of the lien your
creditor may still have the right to take the security property if you
do not pay the debt or default on it. If the lien is on an item of
personal property that is exempt under your State's law or that the
trustee has abandoned, you may be able to redeem the item rather than
reaffirm the debt. To redeem, you make a single payment to the creditor
equal to the current value of the security property, as agreed by the
parties or determined by the court.'.
``(ii) In the case of a reaffirmation under subsection (m)(2),
numbered paragraph 6 in the disclosures required by clause (i) of
this subparagraph shall read as follows:
```6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court.'.
``(4) The form of such agreement required under this paragraph
shall consist of the following:
```Part B: Reaffirmation Agreement. I (we) agree to reaffirm the
debts arising under the credit agreement described below.
```Brief description of credit agreement:
```Description of any changes to the credit agreement made as part
of this reaffirmation agreement:
```Signature: Date:
```Borrower:
```Co-borrower, if also reaffirming these debts:
```Accepted by creditor:
```Date of creditor acceptance:'.
``(5) The declaration shall consist of the following:
``(A) The following certification:
```Part C: Certification by Debtor's Attorney (If Any).
```I hereby certify that (1) this agreement represents a fully
informed and voluntary agreement by the debtor; (2) this agreement does
not impose an undue hardship on the debtor or any dependent of the
debtor; and (3) I have fully advised the debtor of the legal effect and
consequences of this agreement and any default under this agreement.
```Signature of Debtor's Attorney: Date:'.
``(B) If a presumption of undue hardship has been established
with respect to such agreement, such certification shall state that
in the opinion of the attorney, the debtor is able to make the
payment.
``(C) In the case of a reaffirmation agreement under subsection
(m)(2), subparagraph (B) is not applicable.
``(6)(A) The statement in support of such agreement, which the
debtor shall sign and date prior to filing with the court, shall
consist of the following:
```Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
```1. I believe this reaffirmation agreement will not impose an
undue hardship on my dependents or me. I can afford to make the
payments on the reaffirmed debt because my monthly income (take home
pay plus any other income received) is $___, and my actual current
monthly expenses including monthly payments on post-bankruptcy debt and
other reaffirmation agreements total $___, leaving $___ to make the
required payments on this reaffirmed debt. I understand that if my
income less my monthly expenses does not leave enough to make the
payments, this reaffirmation agreement is presumed to be an undue
hardship on me and must be reviewed by the court. However, this
presumption may be overcome if I explain to the satisfaction of the
court how I can afford to make the payments here: ___.
```2. I received a copy of the Reaffirmation Disclosure Statement
in Part A and a completed and signed reaffirmation agreement.'.
``(B) Where the debtor is represented by an attorney and is
reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of support of
the reaffirmation agreement, which the debtor shall sign and date prior
to filing with the court, shall consist of the following:
```I believe this reaffirmation agreement is in my financial
interest. I can afford to make the payments on the reaffirmed debt. I
received a copy of the Reaffirmation Disclosure Statement in Part A and
a completed and signed reaffirmation agreement.'.
``(7) The motion that may be used if approval of such agreement by
the court is required in order for it to be effective, shall be signed
and dated by the movant and shall consist of the following:
```Part E: Motion for Court Approval (To be completed only if the
debtor is not represented by an attorney.). I (we), the debtor(s),
affirm the following to be true and correct:
```I am not represented by an attorney in connection with this
reaffirmation agreement.
```I believe this reaffirmation agreement is in my best interest
based on the income and expenses I have disclosed in my Statement in
Support of this reaffirmation agreement, and because (provide any
additional relevant reasons the court should consider):
```Therefore, I ask the court for an order approving this
reaffirmation agreement.'.
``(8) The court order, which may be used to approve such agreement,
shall consist of the following:
```Court Order: The court grants the debtor's motion and approves
the reaffirmation agreement described above.'.
``(l) Notwithstanding any other provision of this title the
following shall apply:
``(1) A creditor may accept payments from a debtor before and
after the filing of an agreement of the kind specified in
subsection (c) with the court.
``(2) A creditor may accept payments from a debtor under such
agreement that the creditor believes in good faith to be effective.
``(3) The requirements of subsections (c)(2) and (k) shall be
satisfied if disclosures required under those subsections are given
in good faith.
``(m)(1) Until 60 days after an agreement of the kind specified in
subsection (c) is filed with the court (or such additional period as
the court, after notice and a hearing and for cause, orders before the
expiration of such period), it shall be presumed that such agreement is
an undue hardship on the debtor if the debtor's monthly income less the
debtor's monthly expenses as shown on the debtor's completed and signed
statement in support of such agreement required under subsection
(k)(6)(A) is less than the scheduled payments on the reaffirmed debt.
This presumption shall be reviewed by the court. The presumption may be
rebutted in writing by the debtor if the statement includes an
explanation that identifies additional sources of funds to make the
payments as agreed upon under the terms of such agreement. If the
presumption is not rebutted to the satisfaction of the court, the court
may disapprove such agreement. No agreement shall be disapproved
without notice and a hearing to the debtor and creditor, and such
hearing shall be concluded before the entry of the debtor's discharge.
``(2) This subsection does not apply to reaffirmation agreements
where the creditor is a credit union, as defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act.''.
(b) Law Enforcement.--
(1) In general.--Chapter 9 of title 18, United States Code, is
amended by adding at the end the following:
``Sec. 158. Designation of United States attorneys and agents of the
Federal Bureau of Investigation to address abusive
reaffirmations of debt and materially fraudulent statements
in bankruptcy schedules
``(a) In General.--The Attorney General of the United States shall
designate the individuals described in subsection (b) to have primary
responsibility in carrying out enforcement activities in addressing
violations of section 152 or 157 relating to abusive reaffirmations of
debt. In addition to addressing the violations referred to in the
preceding sentence, the individuals described under subsection (b)
shall address violations of section 152 or 157 relating to materially
fraudulent statements in bankruptcy schedules that are intentionally
false or intentionally misleading.
``(b) United States Attorneys and Agents of the Federal Bureau of
Investigation.--The individuals referred to in subsection (a) are--
``(1) the United States attorney for each judicial district of
the United States; and
``(2) an agent of the Federal Bureau of Investigation for each
field office of the Federal Bureau of Investigation.
``(c) Bankruptcy Investigations.--Each United States attorney
designated under this section shall, in addition to any other
responsibilities, have primary responsibility for carrying out the
duties of a United States attorney under section 3057.
``(d) Bankruptcy Procedures.--The bankruptcy courts shall establish
procedures for referring any case that may contain a materially
fraudulent statement in a bankruptcy schedule to the individuals
designated under this section.''.
(2) Clerical amendment.--The table of sections for chapter 9 of
title 18, United States Code, is amended by adding at the end the
following:
``158. Designation of United States attorneys and agents of the Federal
Bureau of Investigation to address abusive reaffirmations of
debt and materially fraudulent statements in bankruptcy
schedules.''.
SEC. 204. PRESERVATION OF CLAIMS AND DEFENSES UPON SALE OF PREDATORY
LOANS.
Section 363 of title 11, United States Code, is amended--
(1) by redesignating subsection (o) as subsection (p), and
(2) by inserting after subsection (n) the following:
``(o) Notwithstanding subsection (f), if a person purchases any
interest in a consumer credit transaction that is subject to the Truth
in Lending Act or any interest in a consumer credit contract (as
defined in section 433.1 of title 16 of the Code of Federal Regulations
(January 1, 2004), as amended from time to time), and if such interest
is purchased through a sale under this section, then such person shall
remain subject to all claims and defenses that are related to such
consumer credit transaction or such consumer credit contract, to the
same extent as such person would be subject to such claims and defenses
of the consumer had such interest been purchased at a sale not under
this section.''.
SEC. 205. GAO STUDY AND REPORT ON REAFFIRMATION AGREEMENT PROCESS.
(a) Study.--The Comptroller General of the United States shall
conduct a study of the reaffirmation agreement process that occurs
under title 11 of the United States Code, to determine the overall
treatment of consumers within the context of such process, and shall
include in such study consideration of--
(1) the policies and activities of creditors with respect to
reaffirmation agreements; and
(2) whether consumers are fully, fairly, and consistently
informed of their rights pursuant to such title.
(b) Report to the Congress.--Not later than 18 months after the
date of the enactment of this Act, the Comptroller General shall submit
to the President pro tempore of the Senate and the Speaker of the House
of Representatives a report on the results of the study conducted under
subsection (a), together with recommendations for legislation (if any)
to address any abusive or coercive tactics found in connection with the
reaffirmation agreement process that occurs under title 11 of the
United States Code.
Subtitle B--Priority Child Support
SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.
Section 101 of title 11, United States Code, is amended--
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the following:
``(14A) `domestic support obligation' means a debt that accrues
before, on, or after the date of the order for relief in a case
under this title, including interest that accrues on that debt as
provided under applicable nonbankruptcy law notwithstanding any
other provision of this title, that is--
``(A) owed to or recoverable by--
``(i) a spouse, former spouse, or child of the debtor
or such child's parent, legal guardian, or responsible
relative; or
``(ii) a governmental unit;
``(B) in the nature of alimony, maintenance, or support
(including assistance provided by a governmental unit) of such
spouse, former spouse, or child of the debtor or such child's
parent, without regard to whether such debt is expressly so
designated;
``(C) established or subject to establishment before, on,
or after the date of the order for relief in a case under this
title, by reason of applicable provisions of--
``(i) a separation agreement, divorce decree, or
property settlement agreement;
``(ii) an order of a court of record; or
``(iii) a determination made in accordance with
applicable nonbankruptcy law by a governmental unit; and
``(D) not assigned to a nongovernmental entity, unless that
obligation is assigned voluntarily by the spouse, former
spouse, child of the debtor, or such child's parent, legal
guardian, or responsible relative for the purpose of collecting
the debt;''.
SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is amended--
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through (6) as paragraphs
(2) through (7), respectively;
(3) in paragraph (2), as so redesignated, by striking ``First''
and inserting ``Second'';
(4) in paragraph (3), as so redesignated, by striking
``Second'' and inserting ``Third'';
(5) in paragraph (4), as so redesignated--
(A) by striking ``Third'' and inserting ``Fourth''; and
(B) by striking the semicolon at the end and inserting a
period;
(6) in paragraph (5), as so redesignated, by striking
``Fourth'' and inserting ``Fifth'';
(7) in paragraph (6), as so redesignated, by striking ``Fifth''
and inserting ``Sixth'';
(8) in paragraph (7), as so redesignated, by striking ``Sixth''
and inserting ``Seventh''; and
(9) by inserting before paragraph (2), as so redesignated, the
following:
``(1) First:
``(A) Allowed unsecured claims for domestic support
obligations that, as of the date of the filing of the petition
in a case under this title, are owed to or recoverable by a
spouse, former spouse, or child of the debtor, or such child's
parent, legal guardian, or responsible relative, without regard
to whether the claim is filed by such person or is filed by a
governmental unit on behalf of such person, on the condition
that funds received under this paragraph by a governmental unit
under this title after the date of the filing of the petition
shall be applied and distributed in accordance with applicable
nonbankruptcy law.
``(B) Subject to claims under subparagraph (A), allowed
unsecured claims for domestic support obligations that, as of
the date of the filing of the petition, are assigned by a
spouse, former spouse, child of the debtor, or such child's
parent, legal guardian, or responsible relative to a
governmental unit (unless such obligation is assigned
voluntarily by the spouse, former spouse, child, parent, legal
guardian, or responsible relative of the child for the purpose
of collecting the debt) or are owed directly to or recoverable
by a governmental unit under applicable nonbankruptcy law, on
the condition that funds received under this paragraph by a
governmental unit under this title after the date of the filing
of the petition be applied and distributed in accordance with
applicable nonbankruptcy law.
``(C) If a trustee is appointed or elected under section
701, 702, 703, 1104, 1202, or 1302, the administrative expenses
of the trustee allowed under paragraphs (1)(A), (2), and (6) of
section 503(b) shall be paid before payment of claims under
subparagraphs (A) and (B), to the extent that the trustee
administers assets that are otherwise available for the payment
of such claims.''.
SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES
INVOLVING DOMESTIC SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended--
(1) in section 1129(a), by adding at the end the following:
``(14) If the debtor is required by a judicial or
administrative order, or by statute, to pay a domestic support
obligation, the debtor has paid all amounts payable under such
order or such statute for such obligation that first become payable
after the date of the filing of the petition.'';
(2) in section 1208(c)--
(A) in paragraph (8), by striking ``or'' at the end;
(B) in paragraph (9), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(10) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the filing
of the petition.'';
(3) in section 1222(a)--
(A) in paragraph (2), by striking ``and'' at the end;
(B) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(4) notwithstanding any other provision of this section, a
plan may provide for less than full payment of all amounts owed for
a claim entitled to priority under section 507(a)(1)(B) only if the
plan provides that all of the debtor's projected disposable income
for a 5-year period beginning on the date that the first payment is
due under the plan will be applied to make payments under the
plan.'';
(4) in section 1222(b)--
(A) in paragraph (10), by striking ``and'' at the end;
(B) by redesignating paragraph (11) as paragraph (12); and
(C) by inserting after paragraph (10) the following:
``(11) provide for the payment of interest accruing after the
date of the filing of the petition on unsecured claims that are
nondischargeable under section 1228(a), except that such interest
may be paid only to the extent that the debtor has disposable
income available to pay such interest after making provision for
full payment of all allowed claims; and'';
(5) in section 1225(a)--
(A) in paragraph (5), by striking ``and'' at the end;
(B) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(7) the debtor has paid all amounts that are required to be
paid under a domestic support obligation and that first become
payable after the date of the filing of the petition if the debtor
is required by a judicial or administrative order, or by statute,
to pay such domestic support obligation.'';
(6) in section 1228(a), in the matter preceding paragraph (1),
by inserting ``, and in the case of a debtor who is required by a
judicial or administrative order, or by statute, to pay a domestic
support obligation, after such debtor certifies that all amounts
payable under such order or such statute that are due on or before
the date of the certification (including amounts due before the
petition was filed, but only to the extent provided for by the
plan) have been paid'' after ``completion by the debtor of all
payments under the plan'';
(7) in section 1307(c)--
(A) in paragraph (9), by striking ``or'' at the end;
(B) in paragraph (10), by striking the period at the end
and inserting ``; or''; and
(C) by adding at the end the following:
``(11) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the filing
of the petition.'';
(8) in section 1322(a)--
(A) in paragraph (2), by striking ``and'' at the end;
(B) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(4) notwithstanding any other provision of this section, a
plan may provide for less than full payment of all amounts owed for
a claim entitled to priority under section 507(a)(1)(B) only if the
plan provides that all of the debtor's projected disposable income
for a 5-year period beginning on the date that the first payment is
due under the plan will be applied to make payments under the
plan.'';
(9) in section 1322(b)--
(A) in paragraph (9), by striking ``; and'' and inserting a
semicolon;
(B) by redesignating paragraph (10) as paragraph (11); and
(C) inserting after paragraph (9) the following:
``(10) provide for the payment of interest accruing after the
date of the filing of the petition on unsecured claims that are
nondischargeable under section 1328(a), except that such interest
may be paid only to the extent that the debtor has disposable
income available to pay such interest after making provision for
full payment of all allowed claims; and'';
(10) in section 1325(a), as amended by section 102, by
inserting after paragraph (7) the following:
``(8) the debtor has paid all amounts that are required to be
paid under a domestic support obligation and that first become
payable after the date of the filing of the petition if the debtor
is required by a judicial or administrative order, or by statute,
to pay such domestic support obligation; and'';
(11) in section 1328(a), in the matter preceding paragraph (1),
by inserting ``, and in the case of a debtor who is required by a
judicial or administrative order, or by statute, to pay a domestic
support obligation, after such debtor certifies that all amounts
payable under such order or such statute that are due on or before
the date of the certification (including amounts due before the
petition was filed, but only to the extent provided for by the
plan) have been paid'' after ``completion by the debtor of all
payments under the plan''.
SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b) of title 11, United States Code, is amended by
striking paragraph (2) and inserting the following:
``(2) under subsection (a)--
``(A) of the commencement or continuation of a civil action
or proceeding--
``(i) for the establishment of paternity;
``(ii) for the establishment or modification of an
order for domestic support obligations;
``(iii) concerning child custody or visitation;
``(iv) for the dissolution of a marriage, except to the
extent that such proceeding seeks to determine the division
of property that is property of the estate; or
``(v) regarding domestic violence;
``(B) of the collection of a domestic support obligation
from property that is not property of the estate;
``(C) with respect to the withholding of income that is
property of the estate or property of the debtor for payment of
a domestic support obligation under a judicial or
administrative order or a statute;
``(D) of the withholding, suspension, or restriction of a
driver's license, a professional or occupational license, or a
recreational license, under State law, as specified in section
466(a)(16) of the Social Security Act;
``(E) of the reporting of overdue support owed by a parent
to any consumer reporting agency as specified in section
466(a)(7) of the Social Security Act;
``(F) of the interception of a tax refund, as specified in
sections 464 and 466(a)(3) of the Social Security Act or under
an analogous State law; or
``(G) of the enforcement of a medical obligation, as
specified under title IV of the Social Security Act;''.
SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY,
MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a)--
(A) by striking paragraph (5) and inserting the following:
``(5) for a domestic support obligation;''; and
(B) by striking paragraph (18);
(2) in subsection (c), by striking ``(6), or (15)'' each place
it appears and inserting ``or (6)''; and
(3) in paragraph (15), as added by Public Law 103-394 (108
Stat. 4133)--
(A) by inserting ``to a spouse, former spouse, or child of
the debtor and'' before ``not of the kind'';
(B) by inserting ``or'' after ``court of record,''; and
(C) by striking ``unless--'' and all that follows through
the end of the paragraph and inserting a semicolon.
SEC. 216. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (c), by striking paragraph (1) and inserting
the following:
``(1) a debt of a kind specified in paragraph (1) or (5) of
section 523(a) (in which case, notwithstanding any provision of
applicable nonbankruptcy law to the contrary, such property shall
be liable for a debt of a kind specified in section 523(a)(5));'';
(2) in subsection (f)(1)(A), by striking the dash and all that
follows through the end of the subparagraph and inserting ``of a
kind that is specified in section 523(a)(5); or''; and
(3) in subsection (g)(2), by striking ``subsection (f)(2)'' and
inserting ``subsection (f)(1)(B)''.
SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL
TRANSFER MOTIONS.
Section 547(c)(7) of title 11, United States Code, is amended to
read as follows:
``(7) to the extent such transfer was a bona fide payment of a
debt for a domestic support obligation;''.
SEC. 218. DISPOSABLE INCOME DEFINED.
Section 1225(b)(2)(A) of title 11, United States Code, is amended
by inserting ``or for a domestic support obligation that first becomes
payable after the date of the filing of the petition'' after
``dependent of the debtor''.
SEC. 219. COLLECTION OF CHILD SUPPORT.
(a) Duties of Trustee Under Chapter 7.--Section 704 of title 11,
United States Code, as amended by section 102, is amended--
(1) in subsection (a)--
(A) in paragraph (8), by striking ``and'' at the end;
(B) in paragraph (9), by striking the period and inserting
a semicolon; and
(C) by adding at the end the following:
``(10) if with respect to the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (c); and''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (a)(10) to which
subsection (a)(10) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (a)(10) of such claim and of the right of
such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of the
Social Security Act for the State in which such holder resides, for
assistance in collecting child support during and after the case
under this title;
``(ii) include in the notice provided under clause (i) the
address and telephone number of such State child support
enforcement agency; and
``(iii) include in the notice provided under clause (i) an
explanation of the rights of such holder to payment of such claim
under this chapter;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice provided under clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge under
section 727, provide written notice to such holder and to such
State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2), (4), or
(14A) of section 523(a); or
``(II) was reaffirmed by the debtor under section
524(c).
``(2)(A) The holder of a claim described in subsection (a)(10) or
the State child support enforcement agency of the State in which such
holder resides may request from a creditor described in paragraph
(1)(C)(iv) the last known address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor that
makes a disclosure of a last known address of a debtor in connection
with a request made under subparagraph (A) shall not be liable by
reason of making such disclosure.''.
(b) Duties of Trustee Under Chapter 11.--Section 1106 of title 11,
United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (6), by striking ``and'' at the end;
(B) in paragraph (7), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(8) if with respect to the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (a)(8) to which
subsection (a)(8) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (a)(8) of such claim and of the right of
such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of the
Social Security Act for the State in which such holder resides, for
assistance in collecting child support during and after the case
under this title; and
``(ii) include in the notice required by clause (i) the address
and telephone number of such State child support enforcement
agency;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice required by clause (i) the name,
address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge under
section 1141, provide written notice to such holder and to such
State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2), (4), or
(14A) of section 523(a); or
``(II) was reaffirmed by the debtor under section
524(c).
``(2)(A) The holder of a claim described in subsection (a)(8) or
the State child enforcement support agency of the State in which such
holder resides may request from a creditor described in paragraph
(1)(C)(iv) the last known address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor that
makes a disclosure of a last known address of a debtor in connection
with a request made under subparagraph (A) shall not be liable by
reason of making such disclosure.''.
(c) Duties of Trustee Under Chapter 12.--Section 1202 of title 11,
United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(6) if with respect to the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (c).''; and
(2) by adding at the end the following:
``(c)(1) In a case described in subsection (b)(6) to which
subsection (b)(6) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (b)(6) of such claim and of the right of
such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of the
Social Security Act for the State in which such holder resides, for
assistance in collecting child support during and after the case
under this title; and
``(ii) include in the notice provided under clause (i) the
address and telephone number of such State child support
enforcement agency;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice provided under clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge under
section 1228, provide written notice to such holder and to such
State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2), (4), or
(14A) of section 523(a); or
``(II) was reaffirmed by the debtor under section
524(c).
``(2)(A) The holder of a claim described in subsection (b)(6) or
the State child support enforcement agency of the State in which such
holder resides may request from a creditor described in paragraph
(1)(C)(iv) the last known address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor that
makes a disclosure of a last known address of a debtor in connection
with a request made under subparagraph (A) shall not be liable by
reason of making that disclosure.''.
(d) Duties of Trustee Under Chapter 13.--Section 1302 of title 11,
United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``and'' at the end;
(B) in paragraph (5), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(6) if with respect to the debtor there is a claim for a
domestic support obligation, provide the applicable notice
specified in subsection (d).''; and
(2) by adding at the end the following:
``(d)(1) In a case described in subsection (b)(6) to which
subsection (b)(6) applies, the trustee shall--
``(A)(i) provide written notice to the holder of the claim
described in subsection (b)(6) of such claim and of the right of
such holder to use the services of the State child support
enforcement agency established under sections 464 and 466 of the
Social Security Act for the State in which such holder resides, for
assistance in collecting child support during and after the case
under this title; and
``(ii) include in the notice provided under clause (i) the
address and telephone number of such State child support
enforcement agency;
``(B)(i) provide written notice to such State child support
enforcement agency of such claim; and
``(ii) include in the notice provided under clause (i) the
name, address, and telephone number of such holder; and
``(C) at such time as the debtor is granted a discharge under
section 1328, provide written notice to such holder and to such
State child support enforcement agency of--
``(i) the granting of the discharge;
``(ii) the last recent known address of the debtor;
``(iii) the last recent known name and address of the
debtor's employer; and
``(iv) the name of each creditor that holds a claim that--
``(I) is not discharged under paragraph (2) or (4) of
section 523(a); or
``(II) was reaffirmed by the debtor under section
524(c).
``(2)(A) The holder of a claim described in subsection (b)(6) or
the State child support enforcement agency of the State in which such
holder resides may request from a creditor described in paragraph
(1)(C)(iv) the last known address of the debtor.
``(B) Notwithstanding any other provision of law, a creditor that
makes a disclosure of a last known address of a debtor in connection
with a request made under subparagraph (A) shall not be liable by
reason of making that disclosure.''.
SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS AND
LOANS.
Section 523(a) of title 11, United States Code, is amended by
striking paragraph (8) and inserting the following:
``(8) unless excepting such debt from discharge under this
paragraph would impose an undue hardship on the debtor and the
debtor's dependents, for--
``(A)(i) an educational benefit overpayment or loan made,
insured, or guaranteed by a governmental unit, or made under
any program funded in whole or in part by a governmental unit
or nonprofit institution; or
``(ii) an obligation to repay funds received as an
educational benefit, scholarship, or stipend; or
``(B) any other educational loan that is a qualified
education loan, as defined in section 221(d)(1) of the Internal
Revenue Code of 1986, incurred by a debtor who is an
individual;''.
Subtitle C--Other Consumer Protections
SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY FILINGS.
Section 110 of title 11, United States Code, is amended--
(1) in subsection (a)(1), by striking ``or an employee of an
attorney'' and inserting ``for the debtor or an employee of such
attorney under the direct supervision of such attorney'';
(2) in subsection (b)--
(A) in paragraph (1), by adding at the end the following:
``If a bankruptcy petition preparer is not an individual, then
an officer, principal, responsible person, or partner of the
bankruptcy petition preparer shall be required to--
``(A) sign the document for filing; and
``(B) print on the document the name and address of that
officer, principal, responsible person, or partner.''; and
(B) by striking paragraph (2) and inserting the following:
``(2)(A) Before preparing any document for filing or accepting any
fees from a debtor, the bankruptcy petition preparer shall provide to
the debtor a written notice which shall be on an official form
prescribed by the Judicial Conference of the United States in
accordance with rule 9009 of the Federal Rules of Bankruptcy Procedure.
``(B) The notice under subparagraph (A)--
``(i) shall inform the debtor in simple language that a
bankruptcy petition preparer is not an attorney and may not
practice law or give legal advice;
``(ii) may contain a description of examples of legal advice
that a bankruptcy petition preparer is not authorized to give, in
addition to any advice that the preparer may not give by reason of
subsection (e)(2); and
``(iii) shall--
``(I) be signed by the debtor and, under penalty of
perjury, by the bankruptcy petition preparer; and
``(II) be filed with any document for filing.'';
(3) in subsection (c)--
(A) in paragraph (2)--
(i) by striking ``(2) For purposes'' and inserting
``(2)(A) Subject to subparagraph (B), for purposes''; and
(ii) by adding at the end the following:
``(B) If a bankruptcy petition preparer is not an individual, the
identifying number of the bankruptcy petition preparer shall be the
Social Security account number of the officer, principal, responsible
person, or partner of the bankruptcy petition preparer.''; and
(B) by striking paragraph (3);
(4) in subsection (d)--
(A) by striking ``(d)(1)'' and inserting ``(d)''; and
(B) by striking paragraph (2);
(5) in subsection (e)--
(A) by striking paragraph (2); and
(B) by adding at the end the following:
``(2)(A) A bankruptcy petition preparer may not offer a potential
bankruptcy debtor any legal advice, including any legal advice
described in subparagraph (B).
``(B) The legal advice referred to in subparagraph (A) includes
advising the debtor--
``(i) whether--
``(I) to file a petition under this title; or
``(II) commencing a case under chapter 7, 11, 12, or 13 is
appropriate;
``(ii) whether the debtor's debts will be discharged in a case
under this title;
``(iii) whether the debtor will be able to retain the debtor's
home, car, or other property after commencing a case under this
title;
``(iv) concerning--
``(I) the tax consequences of a case brought under this
title; or
``(II) the dischargeability of tax claims;
``(v) whether the debtor may or should promise to repay debts
to a creditor or enter into a reaffirmation agreement with a
creditor to reaffirm a debt;
``(vi) concerning how to characterize the nature of the
debtor's interests in property or the debtor's debts; or
``(vii) concerning bankruptcy procedures and rights.'';
(6) in subsection (f)--
(A) by striking ``(f)(1)'' and inserting ``(f)''; and
(B) by striking paragraph (2);
(7) in subsection (g)--
(A) by striking ``(g)(1)'' and inserting ``(g)''; and
(B) by striking paragraph (2);
(8) in subsection (h)--
(A) by redesignating paragraphs (1) through (4) as
paragraphs (2) through (5), respectively;
(B) by inserting before paragraph (2), as so redesignated,
the following:
``(1) The Supreme Court may promulgate rules under section 2075 of
title 28, or the Judicial Conference of the United States may prescribe
guidelines, for setting a maximum allowable fee chargeable by a
bankruptcy petition preparer. A bankruptcy petition preparer shall
notify the debtor of any such maximum amount before preparing any
document for filing for a debtor or accepting any fee from the
debtor.'';
(C) in paragraph (2), as so redesignated--
(i) by striking ``Within 10 days after the date of the
filing of a petition, a bankruptcy petition preparer shall
file a'' and inserting ``A'';
(ii) by inserting ``by the bankruptcy petition preparer
shall be filed together with the petition,'' after
``perjury''; and
(iii) by adding at the end the following: ``If rules or
guidelines setting a maximum fee for services have been
promulgated or prescribed under paragraph (1), the
declaration under this paragraph shall include a
certification that the bankruptcy petition preparer
complied with the notification requirement under paragraph
(1).'';
(D) by striking paragraph (3), as so redesignated, and
inserting the following:
``(3)(A) The court shall disallow and order the immediate turnover
to the bankruptcy trustee any fee referred to in paragraph (2) found to
be in excess of the value of any services--
``(i) rendered by the bankruptcy petition preparer during the
12-month period immediately preceding the date of the filing of the
petition; or
``(ii) found to be in violation of any rule or guideline
promulgated or prescribed under paragraph (1).
``(B) All fees charged by a bankruptcy petition preparer may be
forfeited in any case in which the bankruptcy petition preparer fails
to comply with this subsection or subsection (b), (c), (d), (e), (f),
or (g).
``(C) An individual may exempt any funds recovered under this
paragraph under section 522(b).''; and
(E) in paragraph (4), as so redesignated, by striking ``or
the United States trustee'' and inserting ``the United States
trustee (or the bankruptcy administrator, if any) or the court,
on the initiative of the court,'';
(9) in subsection (i)(1), by striking the matter preceding
subparagraph (A) and inserting the following:
``(i)(1) If a bankruptcy petition preparer violates this section or
commits any act that the court finds to be fraudulent, unfair, or
deceptive, on the motion of the debtor, trustee, United States trustee
(or the bankruptcy administrator, if any), and after notice and a
hearing, the court shall order the bankruptcy petition preparer to pay
to the debtor--'';
(10) in subsection (j)--
(A) in paragraph (2)--
(i) in subparagraph (A)(i)(I), by striking ``a
violation of which subjects a person to criminal penalty'';
(ii) in subparagraph (B)--
(I) by striking ``or has not paid a penalty'' and
inserting ``has not paid a penalty''; and
(II) by inserting ``or failed to disgorge all fees
ordered by the court'' after ``a penalty imposed under
this section,'';
(B) by redesignating paragraph (3) as paragraph (4); and
(C) by inserting after paragraph (2) the following:
``(3) The court, as part of its contempt power, may enjoin a
bankruptcy petition preparer that has failed to comply with a previous
order issued under this section. The injunction under this paragraph
may be issued on the motion of the court, the trustee, or the United
States trustee (or the bankruptcy administrator, if any).''; and
(11) by adding at the end the following:
``(l)(1) A bankruptcy petition preparer who fails to comply with
any provision of subsection (b), (c), (d), (e), (f), (g), or (h) may be
fined not more than $500 for each such failure.
``(2) The court shall triple the amount of a fine assessed under
paragraph (1) in any case in which the court finds that a bankruptcy
petition preparer--
``(A) advised the debtor to exclude assets or income that
should have been included on applicable schedules;
``(B) advised the debtor to use a false Social Security account
number;
``(C) failed to inform the debtor that the debtor was filing
for relief under this title; or
``(D) prepared a document for filing in a manner that failed to
disclose the identity of the bankruptcy petition preparer.
``(3) A debtor, trustee, creditor, or United States trustee (or the
bankruptcy administrator, if any) may file a motion for an order
imposing a fine on the bankruptcy petition preparer for any violation
of this section.
``(4)(A) Fines imposed under this subsection in judicial districts
served by United States trustees shall be paid to the United States
trustee, who shall deposit an amount equal to such fines in a special
account of the United States Trustee System Fund referred to in section
586(e)(2) of title 28. Amounts deposited under this subparagraph shall
be available to fund the enforcement of this section on a national
basis.
``(B) Fines imposed under this subsection in judicial districts
served by bankruptcy administrators shall be deposited as offsetting
receipts to the fund established under section 1931 of title 28, and
shall remain available until expended to reimburse any appropriation
for the amount paid out of such appropriation for expenses of the
operation and maintenance of the courts of the United States.''.
SEC. 222. SENSE OF CONGRESS.
It is the sense of Congress that States should develop curricula
relating to the subject of personal finance, designed for use in
elementary and secondary schools.
SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
Section 507(a) of title 11, United States Code, as amended by
section 212, is amended by inserting after paragraph (9) the following:
``(10) Tenth, allowed claims for death or personal injury
resulting from the operation of a motor vehicle or vessel if such
operation was unlawful because the debtor was intoxicated from
using alcohol, a drug, or another substance.''.
SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) In General.--Section 522 of title 11, United States Code, is
amended--
(1) in subsection (b)--
(A) in paragraph (2)--
(i) in subparagraph (A), by striking ``and'' at the
end;
(ii) in subparagraph (B), by striking the period at the
end and inserting ``; and'';
(iii) by adding at the end the following:
``(C) retirement funds to the extent that those funds are in a
fund or account that is exempt from taxation under section 401,
403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of
1986.''; and
(iv) by striking ``(2)(A) any property'' and inserting:
``(3) Property listed in this paragraph is--
``(A) any property'';
(B) by striking paragraph (1) and inserting:
``(2) Property listed in this paragraph is property that is
specified under subsection (d), unless the State law that is applicable
to the debtor under paragraph (3)(A) specifically does not so
authorize.'';
(C) by striking ``(b) Notwithstanding'' and inserting
``(b)(1) Notwithstanding'';
(D) by striking ``paragraph (2)'' each place it appears and
inserting ``paragraph (3)'';
(E) by striking ``paragraph (1)'' each place it appears and
inserting ``paragraph (2)'';
(F) by striking ``Such property is--''; and
(G) by adding at the end the following:
``(4) For purposes of paragraph (3)(C) and subsection (d)(12), the
following shall apply:
``(A) If the retirement funds are in a retirement fund that has
received a favorable determination under section 7805 of the
Internal Revenue Code of 1986, and that determination is in effect
as of the date of the filing of the petition in a case under this
title, those funds shall be presumed to be exempt from the estate.
``(B) If the retirement funds are in a retirement fund that has
not received a favorable determination under such section 7805,
those funds are exempt from the estate if the debtor demonstrates
that--
``(i) no prior determination to the contrary has been made
by a court or the Internal Revenue Service; and
``(ii)(I) the retirement fund is in substantial compliance
with the applicable requirements of the Internal Revenue Code
of 1986; or
``(II) the retirement fund fails to be in substantial
compliance with the applicable requirements of the Internal
Revenue Code of 1986 and the debtor is not materially
responsible for that failure.
``(C) A direct transfer of retirement funds from 1 fund or
account that is exempt from taxation under section 401, 403, 408,
408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986,
under section 401(a)(31) of the Internal Revenue Code of 1986, or
otherwise, shall not cease to qualify for exemption under paragraph
(3)(C) or subsection (d)(12) by reason of such direct transfer.
``(D)(i) Any distribution that qualifies as an eligible
rollover distribution within the meaning of section 402(c) of the
Internal Revenue Code of 1986 or that is described in clause (ii)
shall not cease to qualify for exemption under paragraph (3)(C) or
subsection (d)(12) by reason of such distribution.
``(ii) A distribution described in this clause is an amount
that--
``(I) has been distributed from a fund or account that is
exempt from taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of 1986; and
``(II) to the extent allowed by law, is deposited in such a
fund or account not later than 60 days after the distribution
of such amount.''; and
(2) in subsection (d)--
(A) in the matter preceding paragraph (1), by striking
``subsection (b)(1)'' and inserting ``subsection (b)(2)''; and
(B) by adding at the end the following:
``(12) Retirement funds to the extent that those funds are in a
fund or account that is exempt from taxation under section 401,
403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of
1986.''.
(b) Automatic Stay.--Section 362(b) of title 11, United States
Code, is amended--
(1) in paragraph (17), by striking ``or'' at the end;
(2) in paragraph (18), by striking the period and inserting a
semicolon; and
(3) by inserting after paragraph (18) the following:
``(19) under subsection (a), of withholding of income from a
debtor's wages and collection of amounts withheld, under the
debtor's agreement authorizing that withholding and collection for
the benefit of a pension, profit-sharing, stock bonus, or other
plan established under section 401, 403, 408, 408A, 414, 457, or
501(c) of the Internal Revenue Code of 1986, that is sponsored by
the employer of the debtor, or an affiliate, successor, or
predecessor of such employer--
``(A) to the extent that the amounts withheld and collected
are used solely for payments relating to a loan from a plan
under section 408(b)(1) of the Employee Retirement Income
Security Act of 1974 or is subject to section 72(p) of the
Internal Revenue Code of 1986; or
``(B) a loan from a thrift savings plan permitted under
subchapter III of chapter 84 of title 5, that satisfies the
requirements of section 8433(g) of such title;
but nothing in this paragraph may be construed to provide that any
loan made under a governmental plan under section 414(d), or a
contract or account under section 403(b), of the Internal Revenue
Code of 1986 constitutes a claim or a debt under this title;''.
(c) Exceptions To Discharge.--Section 523(a) of title 11, United
States Code, as amended by section 215, is amended by inserting after
paragraph (17) the following:
``(18) owed to a pension, profit-sharing, stock bonus, or other
plan established under section 401, 403, 408, 408A, 414, 457, or
501(c) of the Internal Revenue Code of 1986, under--
``(A) a loan permitted under section 408(b)(1) of the
Employee Retirement Income Security Act of 1974, or subject to
section 72(p) of the Internal Revenue Code of 1986; or
``(B) a loan from a thrift savings plan permitted under
subchapter III of chapter 84 of title 5, that satisfies the
requirements of section 8433(g) of such title;
but nothing in this paragraph may be construed to provide that any
loan made under a governmental plan under section 414(d), or a
contract or account under section 403(b), of the Internal Revenue
Code of 1986 constitutes a claim or a debt under this title; or''.
(d) Plan Contents.--Section 1322 of title 11, United States Code,
is amended by adding at the end the following:
``(f) A plan may not materially alter the terms of a loan described
in section 362(b)(19) and any amounts required to repay such loan shall
not constitute `disposable income' under section 1325.''.
(e) Asset Limitation.--
(1) Limitation.--Section 522 of title 11, United States Code,
is amended by adding at the end the following:
``(n) For assets in individual retirement accounts described in
section 408 or 408A of the Internal Revenue Code of 1986, other than a
simplified employee pension under section 408(k) of such Code or a
simple retirement account under section 408(p) of such Code, the
aggregate value of such assets exempted under this section, without
regard to amounts attributable to rollover contributions under section
402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal
Revenue Code of 1986, and earnings thereon, shall not exceed $1,000,000
in a case filed by a debtor who is an individual, except that such
amount may be increased if the interests of justice so require.''.
(2) Adjustment of dollar amounts.--Paragraphs (1) and (2) of
section 104(b) of title 11, United States Code, are amended by
inserting ``522(n),'' after ``522(d),''.
SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.
(a) Exclusions.--Section 541 of title 11, United States Code, is
amended--
(1) in subsection (b)--
(A) in paragraph (4), by striking ``or'' at the end;
(B) by redesignating paragraph (5) as paragraph (9); and
(C) by inserting after paragraph (4) the following:
``(5) funds placed in an education individual retirement
account (as defined in section 530(b)(1) of the Internal Revenue
Code of 1986) not later than 365 days before the date of the filing
of the petition in a case under this title, but--
``(A) only if the designated beneficiary of such account
was a child, stepchild, grandchild, or stepgrandchild of the
debtor for the taxable year for which funds were placed in such
account;
``(B) only to the extent that such funds--
``(i) are not pledged or promised to any entity in
connection with any extension of credit; and
``(ii) are not excess contributions (as described in
section 4973(e) of the Internal Revenue Code of 1986); and
``(C) in the case of funds placed in all such accounts
having the same designated beneficiary not earlier than 720
days nor later than 365 days before such date, only so much of
such funds as does not exceed $5,000;
``(6) funds used to purchase a tuition credit or certificate or
contributed to an account in accordance with section 529(b)(1)(A)
of the Internal Revenue Code of 1986 under a qualified State
tuition program (as defined in section 529(b)(1) of such Code) not
later than 365 days before the date of the filing of the petition
in a case under this title, but--
``(A) only if the designated beneficiary of the amounts
paid or contributed to such tuition program was a child,
stepchild, grandchild, or stepgrandchild of the debtor for the
taxable year for which funds were paid or contributed;
``(B) with respect to the aggregate amount paid or
contributed to such program having the same designated
beneficiary, only so much of such amount as does not exceed the
total contributions permitted under section 529(b)(7) of such
Code with respect to such beneficiary, as adjusted beginning on
the date of the filing of the petition in a case under this
title by the annual increase or decrease (rounded to the
nearest tenth of 1 percent) in the education expenditure
category of the Consumer Price Index prepared by the Department
of Labor; and
``(C) in the case of funds paid or contributed to such
program having the same designated beneficiary not earlier than
720 days nor later than 365 days before such date, only so much
of such funds as does not exceed $5,000;''; and
(2) by adding at the end the following:
``(e) In determining whether any of the relationships specified in
paragraph (5)(A) or (6)(A) of subsection (b) exists, a legally adopted
child of an individual (and a child who is a member of an individual's
household, if placed with such individual by an authorized placement
agency for legal adoption by such individual), or a foster child of an
individual (if such child has as the child's principal place of abode
the home of the debtor and is a member of the debtor's household) shall
be treated as a child of such individual by blood.''.
(b) Debtor's Duties.--Section 521 of title 11, United States Code,
as amended by section 106, is amended by adding at the end the
following:
``(c) In addition to meeting the requirements under subsection (a),
a debtor shall file with the court a record of any interest that a
debtor has in an education individual retirement account (as defined in
section 530(b)(1) of the Internal Revenue Code of 1986) or under a
qualified State tuition program (as defined in section 529(b)(1) of
such Code).''.
SEC. 226. DEFINITIONS.
(a) Definitions.--Section 101 of title 11, United States Code, is
amended--
(1) by inserting after paragraph (2) the following:
``(3) `assisted person' means any person whose debts consist
primarily of consumer debts and the value of whose nonexempt
property is less than $150,000;'';
(2) by inserting after paragraph (4) the following:
``(4A) `bankruptcy assistance' means any goods or services sold
or otherwise provided to an assisted person with the express or
implied purpose of providing information, advice, counsel, document
preparation, or filing, or attendance at a creditors' meeting or
appearing in a case or proceeding on behalf of another or providing
legal representation with respect to a case or proceeding under
this title;''; and
(3) by inserting after paragraph (12) the following:
``(12A) `debt relief agency' means any person who provides any
bankruptcy assistance to an assisted person in return for the
payment of money or other valuable consideration, or who is a
bankruptcy petition preparer under section 110, but does not
include--
``(A) any person who is an officer, director, employee, or
agent of a person who provides such assistance or of the
bankruptcy petition preparer;
``(B) a nonprofit organization that is exempt from taxation
under section 501(c)(3) of the Internal Revenue Code of 1986;
``(C) a creditor of such assisted person, to the extent
that the creditor is assisting such assisted person to
restructure any debt owed by such assisted person to the
creditor;
``(D) a depository institution (as defined in section 3 of
the Federal Deposit Insurance Act) or any Federal credit union
or State credit union (as those terms are defined in section
101 of the Federal Credit Union Act), or any affiliate or
subsidiary of such depository institution or credit union; or
``(E) an author, publisher, distributor, or seller of works
subject to copyright protection under title 17, when acting in
such capacity.''.
(b) Conforming Amendment.--Section 104(b) of title 11, United
States Code, is amended by inserting ``101(3),'' after ``sections''
each place it appears.
SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.
(a) Enforcement.--Subchapter II of chapter 5 of title 11, United
States Code, is amended by adding at the end the following:
``Sec. 526. Restrictions on debt relief agencies
``(a) A debt relief agency shall not--
``(1) fail to perform any service that such agency informed an
assisted person or prospective assisted person it would provide in
connection with a case or proceeding under this title;
``(2) make any statement, or counsel or advise any assisted
person or prospective assisted person to make a statement in a
document filed in a case or proceeding under this title, that is
untrue and misleading, or that upon the exercise of reasonable
care, should have been known by such agency to be untrue or
misleading;
``(3) misrepresent to any assisted person or prospective
assisted person, directly or indirectly, affirmatively or by
material omission, with respect to--
``(A) the services that such agency will provide to such
person; or
``(B) the benefits and risks that may result if such person
becomes a debtor in a case under this title; or
``(4) advise an assisted person or prospective assisted person
to incur more debt in contemplation of such person filing a case
under this title or to pay an attorney or bankruptcy petition
preparer fee or charge for services performed as part of preparing
for or representing a debtor in a case under this title.
``(b) Any waiver by any assisted person of any protection or right
provided under this section shall not be enforceable against the debtor
by any Federal or State court or any other person, but may be enforced
against a debt relief agency.
``(c)(1) Any contract for bankruptcy assistance between a debt
relief agency and an assisted person that does not comply with the
material requirements of this section, section 527, or section 528
shall be void and may not be enforced by any Federal or State court or
by any other person, other than such assisted person.
``(2) Any debt relief agency shall be liable to an assisted person
in the amount of any fees or charges in connection with providing
bankruptcy assistance to such person that such debt relief agency has
received, for actual damages, and for reasonable attorneys' fees and
costs if such agency is found, after notice and a hearing, to have--
``(A) intentionally or negligently failed to comply with any
provision of this section, section 527, or section 528 with respect
to a case or proceeding under this title for such assisted person;
``(B) provided bankruptcy assistance to an assisted person in a
case or proceeding under this title that is dismissed or converted
to a case under another chapter of this title because of such
agency's intentional or negligent failure to file any required
document including those specified in section 521; or
``(C) intentionally or negligently disregarded the material
requirements of this title or the Federal Rules of Bankruptcy
Procedure applicable to such agency.
``(3) In addition to such other remedies as are provided under
State law, whenever the chief law enforcement officer of a State, or an
official or agency designated by a State, has reason to believe that
any person has violated or is violating this section, the State--
``(A) may bring an action to enjoin such violation;
``(B) may bring an action on behalf of its residents to recover
the actual damages of assisted persons arising from such violation,
including any liability under paragraph (2); and
``(C) in the case of any successful action under subparagraph
(A) or (B), shall be awarded the costs of the action and reasonable
attorneys' fees as determined by the court.
``(4) The district courts of the United States for districts
located in the State shall have concurrent jurisdiction of any action
under subparagraph (A) or (B) of paragraph (3).
``(5) Notwithstanding any other provision of Federal law and in
addition to any other remedy provided under Federal or State law, if
the court, on its own motion or on the motion of the United States
trustee or the debtor, finds that a person intentionally violated this
section, or engaged in a clear and consistent pattern or practice of
violating this section, the court may--
``(A) enjoin the violation of such section; or
``(B) impose an appropriate civil penalty against such person.
``(d) No provision of this section, section 527, or section 528
shall--
``(1) annul, alter, affect, or exempt any person subject to
such sections from complying with any law of any State except to
the extent that such law is inconsistent with those sections, and
then only to the extent of the inconsistency; or
``(2) be deemed to limit or curtail the authority or ability--
``(A) of a State or subdivision or instrumentality thereof,
to determine and enforce qualifications for the practice of law
under the laws of that State; or
``(B) of a Federal court to determine and enforce the
qualifications for the practice of law before that court.''.
(b) Conforming Amendment.--The table of sections for chapter 5 of
title 11, United States Code, is amended by inserting after the item
relating to section 525, the following:
``526. Restrictions on debt relief agencies.''.
SEC. 228. DISCLOSURES.
(a) Disclosures.--Subchapter II of chapter 5 of title 11, United
States Code, as amended by section 227, is amended by adding at the end
the following:
``Sec. 527. Disclosures
``(a) A debt relief agency providing bankruptcy assistance to an
assisted person shall provide--
``(1) the written notice required under section 342(b)(1); and
``(2) to the extent not covered in the written notice described
in paragraph (1), and not later than 3 business days after the
first date on which a debt relief agency first offers to provide
any bankruptcy assistance services to an assisted person, a clear
and conspicuous written notice advising assisted persons that--
``(A) all information that the assisted person is required
to provide with a petition and thereafter during a case under
this title is required to be complete, accurate, and truthful;
``(B) all assets and all liabilities are required to be
completely and accurately disclosed in the documents filed to
commence the case, and the replacement value of each asset as
defined in section 506 must be stated in those documents where
requested after reasonable inquiry to establish such value;
``(C) current monthly income, the amounts specified in
section 707(b)(2), and, in a case under chapter 13 of this
title, disposable income (determined in accordance with section
707(b)(2)), are required to be stated after reasonable inquiry;
and
``(D) information that an assisted person provides during
their case may be audited pursuant to this title, and that
failure to provide such information may result in dismissal of
the case under this title or other sanction, including a
criminal sanction.
``(b) A debt relief agency providing bankruptcy assistance to an
assisted person shall provide each assisted person at the same time as
the notices required under subsection (a)(1) the following statement,
to the extent applicable, or one substantially similar. The statement
shall be clear and conspicuous and shall be in a single document
separate from other documents or notices provided to the assisted
person:
```IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM
AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.
```If you decide to seek bankruptcy relief, you can represent
yourself, you can hire an attorney to represent you, or you can get
help in some localities from a bankruptcy petition preparer who is not
an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION
PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR
BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST.
Ask to see the contract before you hire anyone.
```The following information helps you understand what must be done
in a routine bankruptcy case to help you evaluate how much service you
need. Although bankruptcy can be complex, many cases are routine.
```Before filing a bankruptcy case, either you or your attorney
should analyze your eligibility for different forms of debt relief
available under the Bankruptcy Code and which form of relief is most
likely to be beneficial for you. Be sure you understand the relief you
can obtain and its limitations. To file a bankruptcy case, documents
called a Petition, Schedules and Statement of Financial Affairs, as
well as in some cases a Statement of Intention need to be prepared
correctly and filed with the bankruptcy court. You will have to pay a
filing fee to the bankruptcy court. Once your case starts, you will
have to attend the required first meeting of creditors where you may be
questioned by a court official called a `trustee' and by creditors.
```If you choose to file a chapter 7 case, you may be asked by a
creditor to reaffirm a debt. You may want help deciding whether to do
so. A creditor is not permitted to coerce you into reaffirming your
debts.
```If you choose to file a chapter 13 case in which you repay your
creditors what you can afford over 3 to 5 years, you may also want help
with preparing your chapter 13 plan and with the confirmation hearing
on your plan which will be before a bankruptcy judge.
```If you select another type of relief under the Bankruptcy Code
other than chapter 7 or chapter 13, you will want to find out what
should be done from someone familiar with that type of relief.
```Your bankruptcy case may also involve litigation. You are
generally permitted to represent yourself in litigation in bankruptcy
court, but only attorneys, not bankruptcy petition preparers, can give
you legal advice.'.
``(c) Except to the extent the debt relief agency provides the
required information itself after reasonably diligent inquiry of the
assisted person or others so as to obtain such information reasonably
accurately for inclusion on the petition, schedules or statement of
financial affairs, a debt relief agency providing bankruptcy assistance
to an assisted person, to the extent permitted by nonbankruptcy law,
shall provide each assisted person at the time required for the notice
required under subsection (a)(1) reasonably sufficient information
(which shall be provided in a clear and conspicuous writing) to the
assisted person on how to provide all the information the assisted
person is required to provide under this title pursuant to section 521,
including--
``(1) how to value assets at replacement value, determine
current monthly income, the amounts specified in section 707(b)(2)
and, in a chapter 13 case, how to determine disposable income in
accordance with section 707(b)(2) and related calculations;
``(2) how to complete the list of creditors, including how to
determine what amount is owed and what address for the creditor
should be shown; and
``(3) how to determine what property is exempt and how to value
exempt property at replacement value as defined in section 506.
``(d) A debt relief agency shall maintain a copy of the notices
required under subsection (a) of this section for 2 years after the
date on which the notice is given the assisted person.''.
(b) Conforming Amendment.--The table of sections for chapter 5 of
title 11, United States Code, as amended by section 227, is amended by
inserting after the item relating to section 526 the following:
``527. Disclosures.''.
SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.
(a) Enforcement.--Subchapter II of chapter 5 of title 11, United
States Code, as amended by sections 227 and 228, is amended by adding
at the end the following:
``Sec. 528. Requirements for debt relief agencies
``(a) A debt relief agency shall--
``(1) not later than 5 business days after the first date on
which such agency provides any bankruptcy assistance services to an
assisted person, but prior to such assisted person's petition under
this title being filed, execute a written contract with such
assisted person that explains clearly and conspicuously--
``(A) the services such agency will provide to such
assisted person; and
``(B) the fees or charges for such services, and the terms
of payment;
``(2) provide the assisted person with a copy of the fully
executed and completed contract;
``(3) clearly and conspicuously disclose in any advertisement
of bankruptcy assistance services or of the benefits of bankruptcy
directed to the general public (whether in general media, seminars
or specific mailings, telephonic or electronic messages, or
otherwise) that the services or benefits are with respect to
bankruptcy relief under this title; and
``(4) clearly and conspicuously use the following statement in
such advertisement: `We are a debt relief agency. We help people
file for bankruptcy relief under the Bankruptcy Code.' or a
substantially similar statement.
``(b)(1) An advertisement of bankruptcy assistance services or of
the benefits of bankruptcy directed to the general public includes--
``(A) descriptions of bankruptcy assistance in connection with
a chapter 13 plan whether or not chapter 13 is specifically
mentioned in such advertisement; and
``(B) statements such as `federally supervised repayment plan'
or `Federal debt restructuring help' or other similar statements
that could lead a reasonable consumer to believe that debt
counseling was being offered when in fact the services were
directed to providing bankruptcy assistance with a chapter 13 plan
or other form of bankruptcy relief under this title.
``(2) An advertisement, directed to the general public, indicating
that the debt relief agency provides assistance with respect to credit
defaults, mortgage foreclosures, eviction proceedings, excessive debt,
debt collection pressure, or inability to pay any consumer debt shall--
``(A) disclose clearly and conspicuously in such advertisement
that the assistance may involve bankruptcy relief under this title;
and
``(B) include the following statement: `We are a debt relief
agency. We help people file for bankruptcy relief under the
Bankruptcy Code.' or a substantially similar statement.''.
(b) Conforming Amendment.--The table of sections for chapter 5 of
title 11, United States Code, as amended by section 227 and 228, is
amended by inserting after the item relating to section 527, the
following:
``528. Requirements for debt relief agencies.''.
SEC. 230. GAO STUDY.
(a) Study.--Not later than 270 days after the date of enactment of
this Act, the Comptroller General of the United States shall conduct a
study of the feasibility, effectiveness, and cost of requiring trustees
appointed under title 11, United States Code, or the bankruptcy courts,
to provide to the Office of Child Support Enforcement promptly after
the commencement of cases by debtors who are individuals under such
title, the names and social security account numbers of such debtors
for the purposes of allowing such Office to determine whether such
debtors have outstanding obligations for child support (as determined
on the basis of information in the Federal Case Registry or other
national database).
(b) Report.--Not later than 300 days after the date of enactment of
this Act, the Comptroller General shall submit to the President pro
tempore of the Senate and the Speaker of the House of Representatives a
report containing the results of the study required by subsection (a).
SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.
(a) Limitation.--Section 363(b)(1) of title 11, United States Code,
is amended by striking the period at the end and inserting the
following:
``, except that if the debtor in connection with offering a product or
a service discloses to an individual a policy prohibiting the transfer
of personally identifiable information about individuals to persons
that are not affiliated with the debtor and if such policy is in effect
on the date of the commencement of the case, then the trustee may not
sell or lease personally identifiable information to any person
unless--
``(A) such sale or such lease is consistent with such policy;
or
``(B) after appointment of a consumer privacy ombudsman in
accordance with section 332, and after notice and a hearing, the
court approves such sale or such lease--
``(i) giving due consideration to the facts, circumstances,
and conditions of such sale or such lease; and
``(ii) finding that no showing was made that such sale or
such lease would violate applicable nonbankruptcy law.''.
(b) Definition.--Section 101 of title 11, United States Code, is
amended by inserting after paragraph (41) the following:
``(41A) `personally identifiable information' means--
``(A) if provided by an individual to the debtor in
connection with obtaining a product or a service from the
debtor primarily for personal, family, or household purposes--
``(i) the first name (or initial) and last name of such
individual, whether given at birth or time of adoption, or
resulting from a lawful change of name;
``(ii) the geographical address of a physical place of
residence of such individual;
``(iii) an electronic address (including an e-mail
address) of such individual;
``(iv) a telephone number dedicated to contacting such
individual at such physical place of residence;
``(v) a social security account number issued to such
individual; or
``(vi) the account number of a credit card issued to
such individual; or
``(B) if identified in connection with 1 or more of the
items of information specified in subparagraph (A)--
``(i) a birth date, the number of a certificate of
birth or adoption, or a place of birth; or
``(ii) any other information concerning an identified
individual that, if disclosed, will result in contacting or
identifying such individual physically or
electronically;''.
SEC. 232. CONSUMER PRIVACY OMBUDSMAN.
(a) Consumer Privacy Ombudsman.--Title 11 of the United States Code
is amended by inserting after section 331 the following:
``Sec. 332. Consumer privacy ombudsman
``(a) If a hearing is required under section 363(b)(1)(B), the
court shall order the United States trustee to appoint, not later than
5 days before the commencement of the hearing, 1 disinterested person
(other than the United States trustee) to serve as the consumer privacy
ombudsman in the case and shall require that notice of such hearing be
timely given to such ombudsman.
``(b) The consumer privacy ombudsman may appear and be heard at
such hearing and shall provide to the court information to assist the
court in its consideration of the facts, circumstances, and conditions
of the proposed sale or lease of personally identifiable information
under section 363(b)(1)(B). Such information may include presentation
of--
``(1) the debtor's privacy policy;
``(2) the potential losses or gains of privacy to consumers if
such sale or such lease is approved by the court;
``(3) the potential costs or benefits to consumers if such sale
or such lease is approved by the court; and
``(4) the potential alternatives that would mitigate potential
privacy losses or potential costs to consumers.
``(c) A consumer privacy ombudsman shall not disclose any
personally identifiable information obtained by the ombudsman under
this title.''.
(b) Compensation of Consumer Privacy Ombudsman.--Section 330(a)(1)
of title 11, United States Code, is amended in the matter preceding
subparagraph (A), by inserting ``a consumer privacy ombudsman appointed
under section 332,'' before ``an examiner''.
(c) Conforming Amendment.--The table of sections for subchapter II
of chapter 3 of title 11, United States Code, is amended by adding at
the end the following:
``332. Consumer privacy ombudsman.''.
SEC. 233. PROHIBITION ON DISCLOSURE OF NAME OF MINOR CHILDREN.
(a) Prohibition.--Title 11 of the United States Code, as amended by
section 106, is amended by inserting after section 111 the following:
``Sec. 112. Prohibition on disclosure of name of minor children
``The debtor may be required to provide information regarding a
minor child involved in matters under this title but may not be
required to disclose in the public records in the case the name of such
minor child. The debtor may be required to disclose the name of such
minor child in a nonpublic record that is maintained by the court and
made available by the court for examination by the United States
trustee, the trustee, and the auditor (if any) serving under section
586(f) of title 28, in the case. The court, the United States trustee,
the trustee, and such auditor shall not disclose the name of such minor
child maintained in such nonpublic record.''.
(b) Clerical Amendment.--The table of sections for chapter 1 of
title 11, United States Code, as amended by section 106, is amended by
inserting after the item relating to section 111 the following:
``112. Prohibition on disclosure of name of minor children.''.
(c) Conforming Amendment.--Section 107(a) of title 11, United
States Code, is amended by inserting ``and subject to section 112''
after ``section''.
SEC. 234. PROTECTION OF PERSONAL INFORMATION.
(a) Restriction of Public Access to Certain Information Contained
in Bankruptcy Case Files.--Section 107 of title 11, United States Code,
is amended by adding at the end the following:
``(c)(1) The bankruptcy court, for cause, may protect an
individual, with respect to the following types of information to the
extent the court finds that disclosure of such information would create
undue risk of identity theft or other unlawful injury to the individual
or the individual's property:
``(A) Any means of identification (as defined in section
1028(d) of title 18) contained in a paper filed, or to be filed, in
a case under this title.
``(B) Other information contained in a paper described in
subparagraph (A).
``(2) Upon ex parte application demonstrating cause, the court
shall provide access to information protected pursuant to paragraph (1)
to an entity acting pursuant to the police or regulatory power of a
domestic governmental unit.
``(3) The United States trustee, bankruptcy administrator, trustee,
and any auditor serving under section 586(f) of title 28--
``(A) shall have full access to all information contained in
any paper filed or submitted in a case under this title; and
``(B) shall not disclose information specifically protected by
the court under this title.''.
(b) Security of Social Security Account Number of Debtor in Notice
to Creditor.--Section 342(c) of title 11, United States Code, is
amended--
(1) by inserting ``last 4 digits of the'' before ``taxpayer
identification number''; and
(2) by adding at the end the following: ``If the notice
concerns an amendment that adds a creditor to the schedules of
assets and liabilities, the debtor shall include the full taxpayer
identification number in the notice sent to that creditor, but the
debtor shall include only the last 4 digits of the taxpayer
identification number in the copy of the notice filed with the
court.''.
(c) Conforming Amendment.--Section 107(a) of title 11, United
States Code, is amended by striking ``subsection (b),'' and inserting
``subsections (b) and (c),''.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. TECHNICAL AMENDMENTS.
Section 523(a)(17) of title 11, United States Code, is amended--
(1) by striking ``by a court'' and inserting ``on a prisoner by
any court'';
(2) by striking ``section 1915(b) or (f)'' and inserting
``subsection (b) or (f)(2) of section 1915''; and
(3) by inserting ``(or a similar non-Federal law)'' after
``title 28'' each place it appears.
SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(3) if a single or joint case is filed by or against debtor
who is an individual in a case under chapter 7, 11, or 13, and if a
single or joint case of the debtor was pending within the preceding
1-year period but was dismissed, other than a case refiled under a
chapter other than chapter 7 after dismissal under section 707(b)--
``(A) the stay under subsection (a) with respect to any
action taken with respect to a debt or property securing such
debt or with respect to any lease shall terminate with respect
to the debtor on the 30th day after the filing of the later
case;
``(B) on the motion of a party in interest for continuation
of the automatic stay and upon notice and a hearing, the court
may extend the stay in particular cases as to any or all
creditors (subject to such conditions or limitations as the
court may then impose) after notice and a hearing completed
before the expiration of the 30-day period only if the party in
interest demonstrates that the filing of the later case is in
good faith as to the creditors to be stayed; and
``(C) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption may
be rebutted by clear and convincing evidence to the contrary)--
``(i) as to all creditors, if--
``(I) more than 1 previous case under any of
chapters 7, 11, and 13 in which the individual was a
debtor was pending within the preceding 1-year period;
``(II) a previous case under any of chapters 7, 11,
and 13 in which the individual was a debtor was
dismissed within such 1-year period, after the debtor
failed to--
``(aa) file or amend the petition or other
documents as required by this title or the court
without substantial excuse (but mere inadvertence
or negligence shall not be a substantial excuse
unless the dismissal was caused by the negligence
of the debtor's attorney);
``(bb) provide adequate protection as ordered
by the court; or
``(cc) perform the terms of a plan confirmed by
the court; or
``(III) there has not been a substantial change in
the financial or personal affairs of the debtor since
the dismissal of the next most previous case under
chapter 7, 11, or 13 or any other reason to conclude
that the later case will be concluded--
``(aa) if a case under chapter 7, with a
discharge; or
``(bb) if a case under chapter 11 or 13, with a
confirmed plan that will be fully performed; and
``(ii) as to any creditor that commenced an action
under subsection (d) in a previous case in which the
individual was a debtor if, as of the date of dismissal of
such case, that action was still pending or had been
resolved by terminating, conditioning, or limiting the stay
as to actions of such creditor; and
``(4)(A)(i) if a single or joint case is filed by or against a
debtor who is an individual under this title, and if 2 or more
single or joint cases of the debtor were pending within the
previous year but were dismissed, other than a case refiled under
section 707(b), the stay under subsection (a) shall not go into
effect upon the filing of the later case; and
``(ii) on request of a party in interest, the court shall
promptly enter an order confirming that no stay is in effect;
``(B) if, within 30 days after the filing of the later case, a
party in interest requests the court may order the stay to take
effect in the case as to any or all creditors (subject to such
conditions or limitations as the court may impose), after notice
and a hearing, only if the party in interest demonstrates that the
filing of the later case is in good faith as to the creditors to be
stayed;
``(C) a stay imposed under subparagraph (B) shall be effective
on the date of the entry of the order allowing the stay to go into
effect; and
``(D) for purposes of subparagraph (B), a case is presumptively
filed not in good faith (but such presumption may be rebutted by
clear and convincing evidence to the contrary)--
``(i) as to all creditors if--
``(I) 2 or more previous cases under this title in
which the individual was a debtor were pending within the
1-year period;
``(II) a previous case under this title in which the
individual was a debtor was dismissed within the time
period stated in this paragraph after the debtor failed to
file or amend the petition or other documents as required
by this title or the court without substantial excuse (but
mere inadvertence or negligence shall not be substantial
excuse unless the dismissal was caused by the negligence of
the debtor's attorney), failed to provide adequate
protection as ordered by the court, or failed to perform
the terms of a plan confirmed by the court; or
``(III) there has not been a substantial change in the
financial or personal affairs of the debtor since the
dismissal of the next most previous case under this title,
or any other reason to conclude that the later case will
not be concluded, if a case under chapter 7, with a
discharge, and if a case under chapter 11 or 13, with a
confirmed plan that will be fully performed; or
``(ii) as to any creditor that commenced an action under
subsection (d) in a previous case in which the individual was a
debtor if, as of the date of dismissal of such case, such
action was still pending or had been resolved by terminating,
conditioning, or limiting the stay as to such action of such
creditor.''.
SEC. 303. CURBING ABUSIVE FILINGS.
(a) In General.--Section 362(d) of title 11, United States Code, is
amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) with respect to a stay of an act against real property
under subsection (a), by a creditor whose claim is secured by an
interest in such real property, if the court finds that the filing
of the petition was part of a scheme to delay, hinder, and defraud
creditors that involved either--
``(A) transfer of all or part ownership of, or other
interest in, such real property without the consent of the
secured creditor or court approval; or
``(B) multiple bankruptcy filings affecting such real
property.
If recorded in compliance with applicable State laws governing notices
of interests or liens in real property, an order entered under
paragraph (4) shall be binding in any other case under this title
purporting to affect such real property filed not later than 2 years
after the date of the entry of such order by the court, except that a
debtor in a subsequent case under this title may move for relief from
such order based upon changed circumstances or for good cause shown,
after notice and a hearing. Any Federal, State, or local governmental
unit that accepts notices of interests or liens in real property shall
accept any certified copy of an order described in this subsection for
indexing and recording.''.
(b) Automatic Stay.--Section 362(b) of title 11, United States
Code, as amended by section 224, is amended by inserting after
paragraph (19), the following:
``(20) under subsection (a), of any act to enforce any lien
against or security interest in real property following entry of
the order under subsection (d)(4) as to such real property in any
prior case under this title, for a period of 2 years after the date
of the entry of such an order, except that the debtor, in a
subsequent case under this title, may move for relief from such
order based upon changed circumstances or for other good cause
shown, after notice and a hearing;
``(21) under subsection (a), of any act to enforce any lien
against or security interest in real property--
``(A) if the debtor is ineligible under section 109(g) to
be a debtor in a case under this title; or
``(B) if the case under this title was filed in violation
of a bankruptcy court order in a prior case under this title
prohibiting the debtor from being a debtor in another case
under this title;''.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521(a), as so designated by section 106--
(A) in paragraph (4), by striking ``, and'' at the end and
inserting a semicolon;
(B) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(6) in a case under chapter 7 of this title in which the
debtor is an individual, not retain possession of personal property
as to which a creditor has an allowed claim for the purchase price
secured in whole or in part by an interest in such personal
property unless the debtor, not later than 45 days after the first
meeting of creditors under section 341(a), either--
``(A) enters into an agreement with the creditor pursuant
to section 524(c) with respect to the claim secured by such
property; or
``(B) redeems such property from the security interest
pursuant to section 722.
If the debtor fails to so act within the 45-day period referred to in
paragraph (6), the stay under section 362(a) is terminated with respect
to the personal property of the estate or of the debtor which is
affected, such property shall no longer be property of the estate, and
the creditor may take whatever action as to such property as is
permitted by applicable nonbankruptcy law, unless the court determines
on the motion of the trustee filed before the expiration of such 45-day
period, and after notice and a hearing, that such property is of
consequential value or benefit to the estate, orders appropriate
adequate protection of the creditor's interest, and orders the debtor
to deliver any collateral in the debtor's possession to the trustee.'';
and
(2) in section 722, by inserting ``in full at the time of
redemption'' before the period at the end.
SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT
COMPLETE INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.
Title 11, United States Code, is amended--
(1) in section 362, as amended by section 106--
(A) in subsection (c), by striking ``(e), and (f)'' and
inserting ``(e), (f), and (h)'';
(B) by redesignating subsection (h) as subsection (k) and
transferring such subsection so as to insert it after
subsection (j) as added by section 106; and
(C) by inserting after subsection (g) the following:
``(h)(1) In a case in which the debtor is an individual, the stay
provided by subsection (a) is terminated with respect to personal
property of the estate or of the debtor securing in whole or in part a
claim, or subject to an unexpired lease, and such personal property
shall no longer be property of the estate if the debtor fails within
the applicable time set by section 521(a)(2)--
``(A) to file timely any statement of intention required under
section 521(a)(2) with respect to such personal property or to
indicate in such statement that the debtor will either surrender
such personal property or retain it and, if retaining such personal
property, either redeem such personal property pursuant to section
722, enter into an agreement of the kind specified in section
524(c) applicable to the debt secured by such personal property, or
assume such unexpired lease pursuant to section 365(p) if the
trustee does not do so, as applicable; and
``(B) to take timely the action specified in such statement, as
it may be amended before expiration of the period for taking
action, unless such statement specifies the debtor's intention to
reaffirm such debt on the original contract terms and the creditor
refuses to agree to the reaffirmation on such terms.
``(2) Paragraph (1) does not apply if the court determines, on the
motion of the trustee filed before the expiration of the applicable
time set by section 521(a)(2), after notice and a hearing, that such
personal property is of consequential value or benefit to the estate,
and orders appropriate adequate protection of the creditor's interest,
and orders the debtor to deliver any collateral in the debtor's
possession to the trustee. If the court does not so determine, the stay
provided by subsection (a) shall terminate upon the conclusion of the
hearing on the motion.''; and
(2) in section 521, as amended by sections 106 and 225--
(A) in subsection (a)(2) by striking ``consumer'';
(B) in subsection (a)(2)(B)--
(i) by striking ``forty-five days after the filing of a
notice of intent under this section'' and inserting ``30
days after the first date set for the meeting of creditors
under section 341(a)''; and
(ii) by striking ``forty-five day'' and inserting ``30-
day'';
(C) in subsection (a)(2)(C) by inserting ``, except as
provided in section 362(h)'' before the semicolon; and
(D) by adding at the end the following:
``(d) If the debtor fails timely to take the action specified in
subsection (a)(6) of this section, or in paragraphs (1) and (2) of
section 362(h), with respect to property which a lessor or bailor owns
and has leased, rented, or bailed to the debtor or as to which a
creditor holds a security interest not otherwise voidable under section
522(f), 544, 545, 547, 548, or 549, nothing in this title shall prevent
or limit the operation of a provision in the underlying lease or
agreement that has the effect of placing the debtor in default under
such lease or agreement by reason of the occurrence, pendency, or
existence of a proceeding under this title or the insolvency of the
debtor. Nothing in this subsection shall be deemed to justify limiting
such a provision in any other circumstance.''.
SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
(a) In General.--Section 1325(a)(5)(B)(i) of title 11, United
States Code, is amended to read as follows:
``(i) the plan provides that--
``(I) the holder of such claim retain the lien securing
such claim until the earlier of--
``(aa) the payment of the underlying debt
determined under nonbankruptcy law; or
``(bb) discharge under section 1328; and
``(II) if the case under this chapter is dismissed or
converted without completion of the plan, such lien shall
also be retained by such holder to the extent recognized by
applicable nonbankruptcy law; and''.
(b) Restoring the Foundation for Secured Credit.--Section 1325(a)
of title 11, United States Code, is amended by adding at the end the
following:
``For purposes of paragraph (5), section 506 shall not apply to a claim
described in that paragraph if the creditor has a purchase money
security interest securing the debt that is the subject of the claim,
the debt was incurred within the 910-day preceding the date of the
filing of the petition, and the collateral for that debt consists of a
motor vehicle (as defined in section 30102 of title 49) acquired for
the personal use of the debtor, or if collateral for that debt consists
of any other thing of value, if the debt was incurred during the 1-year
period preceding that filing.''.
(c) Definitions.--Section 101 of title 11, United States Code, is
amended--
(1) by inserting after paragraph (13) the following:
``(13A) `debtor's principal residence'--
``(A) means a residential structure, including incidental
property, without regard to whether that structure is attached
to real property; and
``(B) includes an individual condominium or cooperative
unit, a mobile or manufactured home, or trailer;''; and
(2) by inserting after paragraph (27), the following:
``(27A) `incidental property' means, with respect to a debtor's
principal residence--
``(A) property commonly conveyed with a principal residence
in the area where the real property is located;
``(B) all easements, rights, appurtenances, fixtures,
rents, royalties, mineral rights, oil or gas rights or profits,
water rights, escrow funds, or insurance proceeds; and
``(C) all replacements or additions;''.
SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.
Section 522(b)(3) of title 11, United States Code, as so designated
by section 106, is amended--
(1) in subparagraph (A)--
(A) by striking ``180 days'' and inserting ``730 days'';
and
(B) by striking ``, or for a longer portion of such 180-day
period than in any other place'' and inserting ``or if the
debtor's domicile has not been located at a single State for
such 730-day period, the place in which the debtor's domicile
was located for 180 days immediately preceding the 730-day
period or for a longer portion of such 180-day period than in
any other place''; and
(2) by adding at the end the following:
``If the effect of the domiciliary requirement under subparagraph (A)
is to render the debtor ineligible for any exemption, the debtor may
elect to exempt property that is specified under subsection (d).''.
SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.
Section 522 of title 11, United States Code, as amended by section
224, is amended--
(1) in subsection (b)(3)(A), as so designated by this Act, by
inserting ``subject to subsections (o) and (p),'' before ``any
property''; and
(2) by adding at the end the following:
``(o) For purposes of subsection (b)(3)(A), and notwithstanding
subsection (a), the value of an interest in--
``(1) real or personal property that the debtor or a dependent
of the debtor uses as a residence;
``(2) a cooperative that owns property that the debtor or a
dependent of the debtor uses as a residence;
``(3) a burial plot for the debtor or a dependent of the
debtor; or
``(4) real or personal property that the debtor or a dependent
of the debtor claims as a homestead;
shall be reduced to the extent that such value is attributable to any
portion of any property that the debtor disposed of in the 10-year
period ending on the date of the filing of the petition with the intent
to hinder, delay, or defraud a creditor and that the debtor could not
exempt, or that portion that the debtor could not exempt, under
subsection (b), if on such date the debtor had held the property so
disposed of.''.
SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.
(a) Stopping Abusive Conversions From Chapter 13.--Section
348(f)(1) of title 11, United States Code, is amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B)--
(A) by striking ``in the converted case, with allowed
secured claims'' and inserting ``only in a case converted to a
case under chapter 11 or 12, but not in a case converted to a
case under chapter 7, with allowed secured claims in cases
under chapters 11 and 12''; and
(B) by striking the period and inserting ``; and''; and
(3) by adding at the end the following:
``(C) with respect to cases converted from chapter 13--
``(i) the claim of any creditor holding security as of the
date of the petition shall continue to be secured by that
security unless the full amount of such claim determined under
applicable nonbankruptcy law has been paid in full as of the
date of conversion, notwithstanding any valuation or
determination of the amount of an allowed secured claim made
for the purposes of the case under chapter 13; and
``(ii) unless a prebankruptcy default has been fully cured
under the plan at the time of conversion, in any proceeding
under this title or otherwise, the default shall have the
effect given under applicable nonbankruptcy law.''.
(b) Giving Debtors the Ability To Keep Leased Personal Property by
Assumption.--Section 365 of title 11, United States Code, is amended by
adding at the end the following:
``(p)(1) If a lease of personal property is rejected or not timely
assumed by the trustee under subsection (d), the leased property is no
longer property of the estate and the stay under section 362(a) is
automatically terminated.
``(2)(A) If the debtor in a case under chapter 7 is an individual,
the debtor may notify the creditor in writing that the debtor desires
to assume the lease. Upon being so notified, the creditor may, at its
option, notify the debtor that it is willing to have the lease assumed
by the debtor and may condition such assumption on cure of any
outstanding default on terms set by the contract.
``(B) If, not later than 30 days after notice is provided under
subparagraph (A), the debtor notifies the lessor in writing that the
lease is assumed, the liability under the lease will be assumed by the
debtor and not by the estate.
``(C) The stay under section 362 and the injunction under section
524(a)(2) shall not be violated by notification of the debtor and
negotiation of cure under this subsection.
``(3) In a case under chapter 11 in which the debtor is an
individual and in a case under chapter 13, if the debtor is the lessee
with respect to personal property and the lease is not assumed in the
plan confirmed by the court, the lease is deemed rejected as of the
conclusion of the hearing on confirmation. If the lease is rejected,
the stay under section 362 and any stay under section 1301 is
automatically terminated with respect to the property subject to the
lease.''.
(c) Adequate Protection of Lessors and Purchase Money Secured
Creditors.--
(1) Confirmation of plan.--Section 1325(a)(5)(B) of title 11,
United States Code, as amended by section 306, is amended--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by striking ``or'' at the end and
inserting ``and''; and
(C) by adding at the end the following:
``(iii) if--
``(I) property to be distributed pursuant to this
subsection is in the form of periodic payments, such
payments shall be in equal monthly amounts; and
``(II) the holder of the claim is secured by personal
property, the amount of such payments shall not be less
than an amount sufficient to provide to the holder of such
claim adequate protection during the period of the plan;
or''.
(2) Payments.--Section 1326(a) of title 11, United States Code,
is amended to read as follows:
``(a)(1) Unless the court orders otherwise, the debtor shall
commence making payments not later than 30 days after the date of the
filing of the plan or the order for relief, whichever is earlier, in
the amount--
``(A) proposed by the plan to the trustee;
``(B) scheduled in a lease of personal property directly to the
lessor for that portion of the obligation that becomes due after
the order for relief, reducing the payments under subparagraph (A)
by the amount so paid and providing the trustee with evidence of
such payment, including the amount and date of payment; and
``(C) that provides adequate protection directly to a creditor
holding an allowed claim secured by personal property to the extent
the claim is attributable to the purchase of such property by the
debtor for that portion of the obligation that becomes due after
the order for relief, reducing the payments under subparagraph (A)
by the amount so paid and providing the trustee with evidence of
such payment, including the amount and date of payment.
``(2) A payment made under paragraph (1)(A) shall be retained by
the trustee until confirmation or denial of confirmation. If a plan is
confirmed, the trustee shall distribute any such payment in accordance
with the plan as soon as is practicable. If a plan is not confirmed,
the trustee shall return any such payments not previously paid and not
yet due and owing to creditors pursuant to paragraph (3) to the debtor,
after deducting any unpaid claim allowed under section 503(b).
``(3) Subject to section 363, the court may, upon notice and a
hearing, modify, increase, or reduce the payments required under this
subsection pending confirmation of a plan.
``(4) Not later than 60 days after the date of filing of a case
under this chapter, a debtor retaining possession of personal property
subject to a lease or securing a claim attributable in whole or in part
to the purchase price of such property shall provide the lessor or
secured creditor reasonable evidence of the maintenance of any required
insurance coverage with respect to the use or ownership of such
property and continue to do so for so long as the debtor retains
possession of such property.''.
SEC. 310. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States Code, is amended to
read as follows:
``(C)(i) for purposes of subparagraph (A)--
``(I) consumer debts owed to a single creditor and
aggregating more than $500 for luxury goods or services
incurred by an individual debtor on or within 90 days
before the order for relief under this title are presumed
to be nondischargeable; and
``(II) cash advances aggregating more than $750 that
are extensions of consumer credit under an open end credit
plan obtained by an individual debtor on or within 70 days
before the order for relief under this title, are presumed
to be nondischargeable; and
``(ii) for purposes of this subparagraph--
``(I) the terms `consumer', `credit', and `open end
credit plan' have the same meanings as in section 103 of
the Truth in Lending Act; and
``(II) the term `luxury goods or services' does not
include goods or services reasonably necessary for the
support or maintenance of the debtor or a dependent of the
debtor.''.
SEC. 311. AUTOMATIC STAY.
(a) In general.--Section 362(b) of title 11, United States Code, as
amended by sections 224 and 303, is amended by inserting after
paragraph (21), the following:
``(22) subject to subsection (l), under subsection (a)(3), of
the continuation of any eviction, unlawful detainer action, or
similar proceeding by a lessor against a debtor involving
residential property in which the debtor resides as a tenant under
a lease or rental agreement and with respect to which the lessor
has obtained before the date of the filing of the bankruptcy
petition, a judgment for possession of such property against the
debtor;
``(23) subject to subsection (m), under subsection (a)(3), of
an eviction action that seeks possession of the residential
property in which the debtor resides as a tenant under a lease or
rental agreement based on endangerment of such property or the
illegal use of controlled substances on such property, but only if
the lessor files with the court, and serves upon the debtor, a
certification under penalty of perjury that such an eviction action
has been filed, or that the debtor, during the 30-day period
preceding the date of the filing of the certification, has
endangered property or illegally used or allowed to be used a
controlled substance on the property;
``(24) under subsection (a), of any transfer that is not
avoidable under section 544 and that is not avoidable under section
549;''.
(b) Limitations.--Section 362 of title 11, United States Code, as
amended by sections 106 and 305, is amended by adding at the end the
following:
``(l)(1) Except as otherwise provided in this subsection,
subsection (b)(22) shall apply on the date that is 30 days after the
date on which the bankruptcy petition is filed, if the debtor files
with the petition and serves upon the lessor a certification under
penalty of perjury that--
``(A) under nonbankruptcy law applicable in the jurisdiction,
there are circumstances under which the debtor would be permitted
to cure the entire monetary default that gave rise to the judgment
for possession, after that judgment for possession was entered; and
``(B) the debtor (or an adult dependent of the debtor) has
deposited with the clerk of the court, any rent that would become
due during the 30-day period after the filing of the bankruptcy
petition.
``(2) If, within the 30-day period after the filing of the
bankruptcy petition, the debtor (or an adult dependent of the debtor)
complies with paragraph (1) and files with the court and serves upon
the lessor a further certification under penalty of perjury that the
debtor (or an adult dependent of the debtor) has cured, under
nonbankrupcty law applicable in the jurisdiction, the entire monetary
default that gave rise to the judgment under which possession is sought
by the lessor, subsection (b)(22) shall not apply, unless ordered to
apply by the court under paragraph (3).
``(3)(A) If the lessor files an objection to any certification
filed by the debtor under paragraph (1) or (2), and serves such
objection upon the debtor, the court shall hold a hearing within 10
days after the filing and service of such objection to determine if the
certification filed by the debtor under paragraph (1) or (2) is true.
``(B) If the court upholds the objection of the lessor filed under
subparagraph (A)--
``(i) subsection (b)(22) shall apply immediately and relief
from the stay provided under subsection (a)(3) shall not be
required to enable the lessor to complete the process to recover
full possession of the property; and
``(ii) the clerk of the court shall immediately serve upon the
lessor and the debtor a certified copy of the court's order
upholding the lessor's objection.
``(4) If a debtor, in accordance with paragraph (5), indicates on
the petition that there was a judgment for possession of the
residential rental property in which the debtor resides and does not
file a certification under paragraph (1) or (2)--
``(A) subsection (b)(22) shall apply immediately upon failure
to file such certification, and relief from the stay provided under
subsection (a)(3) shall not be required to enable the lessor to
complete the process to recover full possession of the property;
and
``(B) the clerk of the court shall immediately serve upon the
lessor and the debtor a certified copy of the docket indicating the
absence of a filed certification and the applicability of the
exception to the stay under subsection (b)(22).
``(5)(A) Where a judgment for possession of residential property in
which the debtor resides as a tenant under a lease or rental agreement
has been obtained by the lessor, the debtor shall so indicate on the
bankruptcy petition and shall provide the name and address of the
lessor that obtained that pre-petition judgment on the petition and on
any certification filed under this subsection.
``(B) The form of certification filed with the petition, as
specified in this subsection, shall provide for the debtor to certify,
and the debtor shall certify--
``(i) whether a judgment for possession of residential rental
housing in which the debtor resides has been obtained against the
debtor before the date of the filing of the petition; and
``(ii) whether the debtor is claiming under paragraph (1) that
under nonbankruptcy law applicable in the jurisdiction, there are
circumstances under which the debtor would be permitted to cure the
entire monetary default that gave rise to the judgment for
possession, after that judgment of possession was entered, and has
made the appropriate deposit with the court.
``(C) The standard forms (electronic and otherwise) used in a
bankruptcy proceeding shall be amended to reflect the requirements of
this subsection.
``(D) The clerk of the court shall arrange for the prompt
transmittal of the rent deposited in accordance with paragraph (1)(B)
to the lessor.
``(m)(1) Except as otherwise provided in this subsection,
subsection (b)(23) shall apply on the date that is 15 days after the
date on which the lessor files and serves a certification described in
subsection (b)(23).
``(2)(A) If the debtor files with the court an objection to the
truth or legal sufficiency of the certification described in subsection
(b)(23) and serves such objection upon the lessor, subsection (b)(23)
shall not apply, unless ordered to apply by the court under this
subsection.
``(B) If the debtor files and serves the objection under
subparagraph (A), the court shall hold a hearing within 10 days after
the filing and service of such objection to determine if the situation
giving rise to the lessor's certification under paragraph (1) existed
or has been remedied.
``(C) If the debtor can demonstrate to the satisfaction of the
court that the situation giving rise to the lessor's certification
under paragraph (1) did not exist or has been remedied, the stay
provided under subsection (a)(3) shall remain in effect until the
termination of the stay under this section.
``(D) If the debtor cannot demonstrate to the satisfaction of the
court that the situation giving rise to the lessor's certification
under paragraph (1) did not exist or has been remedied--
``(i) relief from the stay provided under subsection (a)(3)
shall not be required to enable the lessor to proceed with the
eviction; and
``(ii) the clerk of the court shall immediately serve upon the
lessor and the debtor a certified copy of the court's order
upholding the lessor's certification.
``(3) If the debtor fails to file, within 15 days, an objection
under paragraph (2)(A)--
``(A) subsection (b)(23) shall apply immediately upon such
failure and relief from the stay provided under subsection (a)(3)
shall not be required to enable the lessor to complete the process
to recover full possession of the property; and
``(B) the clerk of the court shall immediately serve upon the
lessor and the debtor a certified copy of the docket indicating
such failure.''.
SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended--
(1) in section 727(a)(8), by striking ``six'' and inserting
``8''; and
(2) in section 1328, by inserting after subsection (e) the
following:
``(f) Notwithstanding subsections (a) and (b), the court shall not
grant a discharge of all debts provided for in the plan or disallowed
under section 502, if the debtor has received a discharge--
``(1) in a case filed under chapter 7, 11, or 12 of this title
during the 4-year period preceding the date of the order for relief
under this chapter, or
``(2) in a case filed under chapter 13 of this title during the
2-year period preceding the date of such order.''.
SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
(a) Definition.--Section 522(f) of title 11, United States Code, is
amended by adding at the end the following:
``(4)(A) Subject to subparagraph (B), for purposes of paragraph
(1)(B), the term `household goods' means--
``(i) clothing;
``(ii) furniture;
``(iii) appliances;
``(iv) 1 radio;
``(v) 1 television;
``(vi) 1 VCR;
``(vii) linens;
``(viii) china;
``(ix) crockery;
``(x) kitchenware;
``(xi) educational materials and educational equipment
primarily for the use of minor dependent children of the debtor;
(xii) medical equipment and supplies;
``(xiii) furniture exclusively for the use of minor children,
or elderly or disabled dependents of the debtor;
``(xiv) personal effects (including the toys and hobby
equipment of minor dependent children and wedding rings) of the
debtor and the dependents of the debtor; and
``(xv) 1 personal computer and related equipment.
``(B) The term `household goods' does not include--
``(i) works of art (unless by or of the debtor, or any relative
of the debtor);
``(ii) electronic entertainment equipment with a fair market
value of more than $500 in the aggregate (except 1 television, 1
radio, and 1 VCR);
``(iii) items acquired as antiques with a fair market value of
more than $500 in the aggregate;
``(iv) jewelry with a fair market value of more than $500 in
the aggregate (except wedding rings); and
``(v) a computer (except as otherwise provided for in this
section), motor vehicle (including a tractor or lawn tractor),
boat, or a motorized recreational device, conveyance, vehicle,
watercraft, or aircraft.''.
(b) Study.--Not later than 2 years after the date of enactment of
this Act, the Director of the Executive Office for United States
Trustees shall submit a report to the Committee on the Judiciary of the
Senate and the Committee on the Judiciary of the House of
Representatives containing its findings regarding utilization of the
definition of household goods, as defined in section 522(f)(4) of title
11, United States Code, as added by subsection (a), with respect to the
avoidance of nonpossessory, nonpurchase money security interests in
household goods under section 522(f)(1)(B) of title 11, United States
Code, and the impact such section 522(f)(4) has had on debtors and on
the bankruptcy courts. Such report may include recommendations for
amendments to such section 522(f)(4) consistent with the Director's
findings.
SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.
(a) In General.--Section 523(a) of title 11, United States Code, is
amended by inserting after paragraph (14) the following:
``(14A) incurred to pay a tax to a governmental unit, other
than the United States, that would be nondischargeable under
paragraph (1);''.
(b) Discharge Under Chapter 13.--Section 1328(a) of title 11,
United States Code, is amended by striking paragraphs (1) through (3)
and inserting the following:
``(1) provided for under section 1322(b)(5);
``(2) of the kind specified in paragraph (2), (3), (4), (5),
(8), or (9) of section 523(a);
``(3) for restitution, or a criminal fine, included in a
sentence on the debtor's conviction of a crime; or
``(4) for restitution, or damages, awarded in a civil action
against the debtor as a result of willful or malicious injury by
the debtor that caused personal injury to an individual or the
death of an individual.''.
SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13 CASES.
(a) Notice.--Section 342 of title 11, United States Code, as
amended by section 102, is amended--
(1) in subsection (c)--
(A) by inserting ``(1)'' after ``(c)'';
(B) by striking ``, but the failure of such notice to
contain such information shall not invalidate the legal effect
of such notice''; and
(C) by adding at the end the following:
``(2)(A) If, within the 90 days before the commencement of a
voluntary case, a creditor supplies the debtor in at least 2
communications sent to the debtor with the current account number of
the debtor and the address at which such creditor requests to receive
correspondence, then any notice required by this title to be sent by
the debtor to such creditor shall be sent to such address and shall
include such account number.
``(B) If a creditor would be in violation of applicable
nonbankruptcy law by sending any such communication within such 90-day
period and if such creditor supplies the debtor in the last 2
communications with the current account number of the debtor and the
address at which such creditor requests to receive correspondence, then
any notice required by this title to be sent by the debtor to such
creditor shall be sent to such address and shall include such account
number.''; and
(2) by adding at the end the following:
``(e)(1) In a case under chapter 7 or 13 of this title of a debtor
who is an individual, a creditor at any time may both file with the
court and serve on the debtor a notice of address to be used to provide
notice in such case to such creditor.
``(2) Any notice in such case required to be provided to such
creditor by the debtor or the court later than 5 days after the court
and the debtor receive such creditor's notice of address, shall be
provided to such address.
``(f)(1) An entity may file with any bankruptcy court a notice of
address to be used by all the bankruptcy courts or by particular
bankruptcy courts, as so specified by such entity at the time such
notice is filed, to provide notice to such entity in all cases under
chapters 7 and 13 pending in the courts with respect to which such
notice is filed, in which such entity is a creditor.
``(2) In any case filed under chapter 7 or 13, any notice required
to be provided by a court with respect to which a notice is filed under
paragraph (1), to such entity later than 30 days after the filing of
such notice under paragraph (1) shall be provided to such address
unless with respect to a particular case a different address is
specified in a notice filed and served in accordance with subsection
(e).
``(3) A notice filed under paragraph (1) may be withdrawn by such
entity.
``(g)(1) Notice provided to a creditor by the debtor or the court
other than in accordance with this section (excluding this subsection)
shall not be effective notice until such notice is brought to the
attention of such creditor. If such creditor designates a person or an
organizational subdivision of such creditor to be responsible for
receiving notices under this title and establishes reasonable
procedures so that such notices receivable by such creditor are to be
delivered to such person or such subdivision, then a notice provided to
such creditor other than in accordance with this section (excluding
this subsection) shall not be considered to have been brought to the
attention of such creditor until such notice is received by such person
or such subdivision.
``(2) A monetary penalty may not be imposed on a creditor for a
violation of a stay in effect under section 362(a) (including a
monetary penalty imposed under section 362(k)) or for failure to comply
with section 542 or 543 unless the conduct that is the basis of such
violation or of such failure occurs after such creditor receives notice
effective under this section of the order for relief.''.
(b) Debtor's Duties.--Section 521 of title 11, United States Code,
as amended by sections 106, 225, and 305, is amended--
(1) in subsection (a), as so designated by section 106, by
amending paragraph (1) to read as follows:
``(1) file--
``(A) a list of creditors; and
``(B) unless the court orders otherwise--
``(i) a schedule of assets and liabilities;
``(ii) a schedule of current income and current
expenditures;
``(iii) a statement of the debtor's financial affairs
and, if section 342(b) applies, a certificate--
``(I) of an attorney whose name is indicated on the
petition as the attorney for the debtor, or a
bankruptcy petition preparer signing the petition under
section 110(b)(1), indicating that such attorney or the
bankruptcy petition preparer delivered to the debtor
the notice required by section 342(b); or
``(II) if no attorney is so indicated, and no
bankruptcy petition preparer signed the petition, of
the debtor that such notice was received and read by
the debtor;
``(iv) copies of all payment advices or other evidence
of payment received within 60 days before the date of the
filing of the petition, by the debtor from any employer of
the debtor;
``(v) a statement of the amount of monthly net income,
itemized to show how the amount is calculated; and
``(vi) a statement disclosing any reasonably
anticipated increase in income or expenditures over the 12-
month period following the date of the filing of the
petition;''; and
(2) by adding at the end the following:
``(e)(1) If the debtor in a case under chapter 7 or 13 is an
individual and if a creditor files with the court at any time a request
to receive a copy of the petition, schedules, and statement of
financial affairs filed by the debtor, then the court shall make such
petition, such schedules, and such statement available to such
creditor.
``(2)(A) The debtor shall provide--
``(i) not later than 7 days before the date first set for the
first meeting of creditors, to the trustee a copy of the Federal
income tax return required under applicable law (or at the election
of the debtor, a transcript of such return) for the most recent tax
year ending immediately before the commencement of the case and for
which a Federal income tax return was filed; and
``(ii) at the same time the debtor complies with clause (i), a
copy of such return (or if elected under clause (i), such
transcript) to any creditor that timely requests such copy.
``(B) If the debtor fails to comply with clause (i) or (ii) of
subparagraph (A), the court shall dismiss the case unless the debtor
demonstrates that the failure to so comply is due to circumstances
beyond the control of the debtor.
``(C) If a creditor requests a copy of such tax return or such
transcript and if the debtor fails to provide a copy of such tax return
or such transcript to such creditor at the time the debtor provides
such tax return or such transcript to the trustee, then the court shall
dismiss the case unless the debtor demonstrates that the failure to
provide a copy of such tax return or such transcript is due to
circumstances beyond the control of the debtor.
``(3) If a creditor in a case under chapter 13 files with the court
at any time a request to receive a copy of the plan filed by the
debtor, then the court shall make available to such creditor a copy of
the plan--
``(A) at a reasonable cost; and
``(B) not later than 5 days after such request is filed.
``(f) At the request of the court, the United States trustee, or
any party in interest in a case under chapter 7, 11, or 13, a debtor
who is an individual shall file with the court--
``(1) at the same time filed with the taxing authority, a copy
of each Federal income tax return required under applicable law (or
at the election of the debtor, a transcript of such tax return)
with respect to each tax year of the debtor ending while the case
is pending under such chapter;
``(2) at the same time filed with the taxing authority, each
Federal income tax return required under applicable law (or at the
election of the debtor, a transcript of such tax return) that had
not been filed with such authority as of the date of the
commencement of the case and that was subsequently filed for any
tax year of the debtor ending in the 3-year period ending on the
date of the commencement of the case;
``(3) a copy of each amendment to any Federal income tax return
or transcript filed with the court under paragraph (1) or (2); and
``(4) in a case under chapter 13--
``(A) on the date that is either 90 days after the end of
such tax year or 1 year after the date of the commencement of
the case, whichever is later, if a plan is not confirmed before
such later date; and
``(B) annually after the plan is confirmed and until the
case is closed, not later than the date that is 45 days before
the anniversary of the confirmation of the plan;
a statement, under penalty of perjury, of the income and
expenditures of the debtor during the tax year of the debtor most
recently concluded before such statement is filed under this
paragraph, and of the monthly income of the debtor, that shows how
income, expenditures, and monthly income are calculated.
``(g)(1) A statement referred to in subsection (f)(4) shall
disclose--
``(A) the amount and sources of the income of the debtor;
``(B) the identity of any person responsible with the debtor
for the support of any dependent of the debtor; and
``(C) the identity of any person who contributed, and the
amount contributed, to the household in which the debtor resides.
``(2) The tax returns, amendments, and statement of income and
expenditures described in subsections (e)(2)(A) and (f) shall be
available to the United States trustee (or the bankruptcy
administrator, if any), the trustee, and any party in interest for
inspection and copying, subject to the requirements of section 315(c)
of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
``(h) If requested by the United States trustee or by the trustee,
the debtor shall provide--
``(1) a document that establishes the identity of the debtor,
including a driver's license, passport, or other document that
contains a photograph of the debtor; or
``(2) such other personal identifying information relating to
the debtor that establishes the identity of the debtor.''.
(c)(1) Not later than 180 days after the date of the enactment of
this Act, the Director of the Administrative Office of the United
States Courts shall establish procedures for safeguarding the
confidentiality of any tax information required to be provided under
this section.
(2) The procedures under paragraph (1) shall include restrictions
on creditor access to tax information that is required to be provided
under this section.
(3) Not later than 540 days after the date of enactment of this
Act, the Director of the Administrative Office of the United States
Courts shall prepare and submit to the President pro tempore of the
Senate and the Speaker of the House of Representatives a report that--
(A) assesses the effectiveness of the procedures established
under paragraph (1); and
(B) if appropriate, includes proposed legislation to--
(i) further protect the confidentiality of tax information;
and
(ii) provide penalties for the improper use by any person
of the tax information required to be provided under this
section.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE
REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as amended by sections
106, 225, 305, and 315, is amended by adding at the end the following:
``(i)(1) Subject to paragraphs (2) and (4) and notwithstanding
section 707(a), if an individual debtor in a voluntary case under
chapter 7 or 13 fails to file all of the information required under
subsection (a)(1) within 45 days after the date of the filing of the
petition, the case shall be automatically dismissed effective on the
46th day after the date of the filing of the petition.
``(2) Subject to paragraph (4) and with respect to a case described
in paragraph (1), any party in interest may request the court to enter
an order dismissing the case. If requested, the court shall enter an
order of dismissal not later than 5 days after such request.
``(3) Subject to paragraph (4) and upon request of the debtor made
within 45 days after the date of the filing of the petition described
in paragraph (1), the court may allow the debtor an additional period
of not to exceed 45 days to file the information required under
subsection (a)(1) if the court finds justification for extending the
period for the filing.
``(4) Notwithstanding any other provision of this subsection, on
the motion of the trustee filed before the expiration of the applicable
period of time specified in paragraph (1), (2), or (3), and after
notice and a hearing, the court may decline to dismiss the case if the
court finds that the debtor attempted in good faith to file all the
information required by subsection (a)(1)(B)(iv) and that the best
interests of creditors would be served by administration of the
case.''.
SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE
PLAN.
Section 1324 of title 11, United States Code, is amended--
(1) by striking ``After'' and inserting the following:
``(a) Except as provided in subsection (b) and after''; and
(2) by adding at the end the following:
``(b) The hearing on confirmation of the plan may be held not
earlier than 20 days and not later than 45 days after the date of the
meeting of creditors under section 341(a), unless the court determines
that it would be in the best interests of the creditors and the estate
to hold such hearing at an earlier date and there is no objection to
such earlier date.''.
SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN CERTAIN CASES.
Title 11, United States Code, is amended--
(1) by amending section 1322(d) to read as follows:
``(d)(1) If the current monthly income of the debtor and the
debtor's spouse combined, when multiplied by 12, is not less than--
``(A) in the case of a debtor in a household of 1 person, the
median family income of the applicable State for 1 earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the applicable
State for a family of the same number or fewer individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the applicable
State for a family of 4 or fewer individuals, plus $525 per month
for each individual in excess of 4,
the plan may not provide for payments over a period that is longer than
5 years.
``(2) If the current monthly income of the debtor and the debtor's
spouse combined, when multiplied by 12, is less than--
``(A) in the case of a debtor in a household of 1 person, the
median family income of the applicable State for 1 earner;
``(B) in the case of a debtor in a household of 2, 3, or 4
individuals, the highest median family income of the applicable
State for a family of the same number or fewer individuals; or
``(C) in the case of a debtor in a household exceeding 4
individuals, the highest median family income of the applicable
State for a family of 4 or fewer individuals, plus $525 per month
for each individual in excess of 4,
the plan may not provide for payments over a period that is longer than
3 years, unless the court, for cause, approves a longer period, but the
court may not approve a period that is longer than 5 years.'';
(2) in section 1325(b)(1)(B), by striking ``three-year period''
and inserting ``applicable commitment period''; and
(3) in section 1325(b), as amended by section 102, by adding at
the end the following:
``(4) For purposes of this subsection, the `applicable commitment
period'--
``(A) subject to subparagraph (B), shall be--
``(i) 3 years; or
``(ii) not less than 5 years, if the current monthly income
of the debtor and the debtor's spouse combined, when multiplied
by 12, is not less than--
``(I) in the case of a debtor in a household of 1
person, the median family income of the applicable State
for 1 earner;
``(II) in the case of a debtor in a household of 2, 3,
or 4 individuals, the highest median family income of the
applicable State for a family of the same number or fewer
individuals; or
``(III) in the case of a debtor in a household
exceeding 4 individuals, the highest median family income
of the applicable State for a family of 4 or fewer
individuals, plus $525 per month for each individual in
excess of 4; and
``(B) may be less than 3 or 5 years, whichever is applicable
under subparagraph (A), but only if the plan provides for payment
in full of all allowed unsecured claims over a shorter period.'';
and
(4) in section 1329(c), by striking ``three years'' and
inserting ``the applicable commitment period under section
1325(b)(1)(B)''.
SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE
FEDERAL RULES OF BANKRUPTCY PROCEDURE.
It is the sense of Congress that rule 9011 of the Federal Rules of
Bankruptcy Procedure (11 U.S.C. App.) should be modified to include a
requirement that all documents (including schedules), signed and
unsigned, submitted to the court or to a trustee by debtors who
represent themselves and debtors who are represented by attorneys be
submitted only after the debtors or the debtors' attorneys have made
reasonable inquiry to verify that the information contained in such
documents is--
(1) well grounded in fact; and
(2) warranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law.
SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is amended--
(1) by inserting ``(1)'' after ``(e)''; and
(2) by adding at the end the following:
``(2) Notwithstanding paragraph (1), in a case under chapter 7, 11,
or 13 in which the debtor is an individual, the stay under subsection
(a) shall terminate on the date that is 60 days after a request is made
by a party in interest under subsection (d), unless--
``(A) a final decision is rendered by the court during the 60-
day period beginning on the date of the request; or
``(B) such 60-day period is extended--
``(i) by agreement of all parties in interest; or
``(ii) by the court for such specific period of time as the
court finds is required for good cause, as described in
findings made by the court.''.
SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.
(a) Property of the Estate.--
(1) In general.--Subchapter I of chapter 11 of title 11, United
States Code, is amended by adding at the end the following:
``Sec. 1115. Property of the estate
``(a) In a case in which the debtor is an individual, property of
the estate includes, in addition to the property specified in section
541--
``(1) all property of the kind specified in section 541 that
the debtor acquires after the commencement of the case but before
the case is closed, dismissed, or converted to a case under chapter
7, 12, or 13, whichever occurs first; and
``(2) earnings from services performed by the debtor after the
commencement of the case but before the case is closed, dismissed,
or converted to a case under chapter 7, 12, or 13, whichever occurs
first.
``(b) Except as provided in section 1104 or a confirmed plan or
order confirming a plan, the debtor shall remain in possession of all
property of the estate.''.
(2) Clerical amendment.--The table of sections for subchapter I
of chapter 11 of title 11, United States Code, is amended by adding
at the end the following:
``1115. Property of the estate.''.
(b) Contents of Plan.--Section 1123(a) of title 11, United States
Code, is amended--
(1) in paragraph (6), by striking ``and'' at the end;
(2) in paragraph (7), by striking the period and inserting ``;
and''; and
(3) by adding at the end the following:
``(8) in a case in which the debtor is an individual, provide
for the payment to creditors under the plan of all or such portion
of earnings from personal services performed by the debtor after
the commencement of the case or other future income of the debtor
as is necessary for the execution of the plan.''.
(c) Confirmation of Plan.--
(1) Requirements relating to value of property.--Section
1129(a) of title 11, United States Code, as amended by section 213,
is amended by adding at the end the following:
``(15) In a case in which the debtor is an individual and in
which the holder of an allowed unsecured claim objects to the
confirmation of the plan--
``(A) the value, as of the effective date of the plan, of
the property to be distributed under the plan on account of
such claim is not less than the amount of such claim; or
``(B) the value of the property to be distributed under the
plan is not less than the projected disposable income of the
debtor (as defined in section 1325(b)(2)) to be received during
the 5-year period beginning on the date that the first payment
is due under the plan, or during the period for which the plan
provides payments, whichever is longer.''.
(2) Requirement relating to interests in property.--Section
1129(b)(2)(B)(ii) of title 11, United States Code, is amended by
inserting before the period at the end the following: ``, except
that in a case in which the debtor is an individual, the debtor may
retain property included in the estate under section 1115, subject
to the requirements of subsection (a)(14) of this section''.
(d) Effect of Confirmation.--Section 1141(d) of title 11, United
States Code, is amended--
(1) in paragraph (2), by striking ``The confirmation of a plan
does not discharge an individual debtor'' and inserting ``A
discharge under this chapter does not discharge a debtor who is an
individual''; and
(2) by adding at the end the following:
``(5) In a case in which the debtor is an individual--
``(A) unless after notice and a hearing the court orders
otherwise for cause, confirmation of the plan does not discharge
any debt provided for in the plan until the court grants a
discharge on completion of all payments under the plan;
``(B) at any time after the confirmation of the plan, and after
notice and a hearing, the court may grant a discharge to the debtor
who has not completed payments under the plan if--
``(i) the value, as of the effective date of the plan, of
property actually distributed under the plan on account of each
allowed unsecured claim is not less than the amount that would
have been paid on such claim if the estate of the debtor had
been liquidated under chapter 7 on such date; and
``(ii) modification of the plan under section 1127 is not
practicable; and''.
(e) Modification of Plan.--Section 1127 of title 11, United States
Code, is amended by adding at the end the following:
``(e) If the debtor is an individual, the plan may be modified at
any time after confirmation of the plan but before the completion of
payments under the plan, whether or not the plan has been substantially
consummated, upon request of the debtor, the trustee, the United States
trustee, or the holder of an allowed unsecured claim, to--
``(1) increase or reduce the amount of payments on claims of a
particular class provided for by the plan;
``(2) extend or reduce the time period for such payments; or
``(3) alter the amount of the distribution to a creditor whose
claim is provided for by the plan to the extent necessary to take
account of any payment of such claim made other than under the
plan.
``(f)(1) Sections 1121 through 1128 and the requirements of section
1129 apply to any modification under subsection (a).
``(2) The plan, as modified, shall become the plan only after there
has been disclosure under section 1125 as the court may direct, notice
and a hearing, and such modification is approved.''.
SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION.
(a) Exemptions.--Section 522 of title 11, United States Code, as
amended by sections 224 and 308, is amended by adding at the end the
following:
``(p)(1) Except as provided in paragraph (2) of this subsection and
sections 544 and 548, as a result of electing under subsection
(b)(3)(A) to exempt property under State or local law, a debtor may not
exempt any amount of interest that was acquired by the debtor during
the 1215-day period preceding the date of the filing of the petition
that exceeds in the aggregate $125,000 in value in--
``(A) real or personal property that the debtor or a dependent
of the debtor uses as a residence;
``(B) a cooperative that owns property that the debtor or a
dependent of the debtor uses as a residence;
``(C) a burial plot for the debtor or a dependent of the
debtor; or
``(D) real or personal property that the debtor or dependent of
the debtor claims as a homestead.
``(2)(A) The limitation under paragraph (1) shall not apply to an
exemption claimed under subsection (b)(3)(A) by a family farmer for the
principal residence of such farmer.
``(B) For purposes of paragraph (1), any amount of such interest
does not include any interest transferred from a debtor's previous
principal residence (which was acquired prior to the beginning of such
1215-day period) into the debtor's current principal residence, if the
debtor's previous and current residences are located in the same State.
``(q)(1) As a result of electing under subsection (b)(3)(A) to
exempt property under State or local law, a debtor may not exempt any
amount of an interest in property described in subparagraphs (A), (B),
(C), and (D) of subsection (p)(1) which exceeds in the aggregate
$125,000 if--
``(A) the court determines, after notice and a hearing, that
the debtor has been convicted of a felony (as defined in section
3156 of title 18), which under the circumstances, demonstrates that
the filing of the case was an abuse of the provisions of this
title; or
``(B) the debtor owes a debt arising from--
``(i) any violation of the Federal securities laws (as
defined in section 3(a)(47) of the Securities Exchange Act of
1934), any State securities laws, or any regulation or order
issued under Federal securities laws or State securities laws;
``(ii) fraud, deceit, or manipulation in a fiduciary
capacity or in connection with the purchase or sale of any
security registered under section 12 or 15(d) of the Securities
Exchange Act of 1934 or under section 6 of the Securities Act
of 1933;
``(iii) any civil remedy under section 1964 of title 18; or
``(iv) any criminal act, intentional tort, or willful or
reckless misconduct that caused serious physical injury or
death to another individual in the preceding 5 years.
``(2) Paragraph (1) shall not apply to the extent the amount of an
interest in property described in subparagraphs (A), (B), (C), and (D)
of subsection (p)(1) is reasonably necessary for the support of the
debtor and any dependent of the debtor.''.
(b) Adjustment of Dollar Amounts.--Paragraphs (1) and (2) of
section 104(b) of title 11, United States Code, as amended by section
224, are amended by inserting ``522(p), 522(q),'' after ``522(n),''.
SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND
OTHER PROPERTY FROM THE ESTATE.
Section 541(b) of title 11, United States Code, as amended by
section 225, is amended by adding after paragraph (6), as added by
section 225(a)(1)(C), the following:
``(7) any amount--
``(A) withheld by an employer from the wages of employees
for payment as contributions--
``(i) to--
``(I) an employee benefit plan that is subject to
title I of the Employee Retirement Income Security Act
of 1974 or under an employee benefit plan which is a
governmental plan under section 414(d) of the Internal
Revenue Code of 1986;
``(II) a deferred compensation plan under section
457 of the Internal Revenue Code of 1986; or
``(III) a tax-deferred annuity under section 403(b)
of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not
constitute disposable income as defined in section
1325(b)(2); or
``(ii) to a health insurance plan regulated by State
law whether or not subject to such title; or
``(B) received by an employer from employees for payment as
contributions--
``(i) to--
``(I) an employee benefit plan that is subject to
title I of the Employee Retirement Income Security Act
of 1974 or under an employee benefit plan which is a
governmental plan under section 414(d) of the Internal
Revenue Code of 1986;
``(II) a deferred compensation plan under section
457 of the Internal Revenue Code of 1986; or
``(III) a tax-deferred annuity under section 403(b)
of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not
constitute disposable income, as defined in section
1325(b)(2); or
``(ii) to a health insurance plan regulated by State
law whether or not subject to such title;''.
SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING BANKRUPTCY
PROFESSIONALS.
(a) In General.--Section 1334 of title 28, United States Code, is
amended--
(1) in subsection (b), by striking ``Notwithstanding'' and
inserting ``Except as provided in subsection (e)(2), and
notwithstanding''; and
(2) by striking subsection (e) and inserting the following:
``(e) The district court in which a case under title 11 is
commenced or is pending shall have exclusive jurisdiction--
``(1) of all the property, wherever located, of the debtor as
of the commencement of such case, and of property of the estate;
and
``(2) over all claims or causes of action that involve
construction of section 327 of title 11, United States Code, or
rules relating to disclosure requirements under section 327.''.
(b) Applicability.--This section shall only apply to cases filed
after the date of enactment of this Act.
SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.
(a) Actions Under Chapter 7, 11, or 13 of Title 11, United States
Code.--Section 1930(a) of title 28, United States Code, is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) For a case commenced under--
``(A) chapter 7 of title 11, $200; and
``(B) chapter 13 of title 11, $150.''; and
(2) in paragraph (3), by striking ``$800'' and inserting
``$1000''.
(b) United States Trustee System Fund.--Section 589a(b) of title
28, United States Code, is amended--
(1) by striking paragraph (1) and inserting the following:
``(1)(A) 40.63 percent of the fees collected under section
1930(a)(1)(A) of this title; and
``(B) 70.00 percent of the fees collected under section
1930(a)(1)(B);'';
(2) in paragraph (2), by striking ``one-half'' and inserting
``75 percent''; and
(3) in paragraph (4), by striking ``one-half'' and inserting
``100 percent''.
(c) Collection and Deposit of Miscellaneous Bankruptcy Fees.--
Section 406(b) of the Judiciary Appropriations Act, 1990 (28 U.S.C.
1931 note) is amended by striking ``pursuant to 28 U.S.C. section
1930(b)'' and all that follows through ``28 U.S.C. section 1931'' and
inserting ``under section 1930(b) of title 28, United States Code,
31.25 of the fees collected under section 1930(a)(1)(A) of that title,
30.00 percent of the fees collected under section 1930(a)(1)(B) of that
title, and 25 percent of the fees collected under section 1930(a)(3) of
that title shall be deposited as offsetting receipts to the fund
established under section 1931 of that title''.
(d) Sunset Date.--The amendments made by subsections (b) and (c)
shall be effective during the 2-year period beginning on the date of
enactment of this Act.
(e) Use of Increased Receipts.--
(1) Judges' salaries and benefits.--The amount of fees
collected under paragraphs (1) and (3) of section 1930(a) of title
28, United States Code, during the 5-year period beginning on the
date of enactment of this Act, that is greater than the amount that
would have been collected if the amendments made by subsection (a)
had not taken effect shall be used, to the extent necessary, to pay
the salaries and benefits of the judges appointed pursuant to
section 1223 of this Act.
(2) Remainder.--Any amount described in paragraph (1), which is
not used for the purpose described in paragraph (1), shall be
deposited into the Treasury of the United States to the extent
necessary to offset the decrease in governmental receipts resulting
from the amendments made by subsections (b) and (c).
SEC. 326. SHARING OF COMPENSATION.
Section 504 of title 11, United States Code, is amended by adding
at the end the following:
``(c) This section shall not apply with respect to sharing, or
agreeing to share, compensation with a bona fide public service
attorney referral program that operates in accordance with non-Federal
law regulating attorney referral services and with rules of
professional responsibility applicable to attorney acceptance of
referrals.''.
SEC. 327. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code, is amended by--
(1) inserting ``(1)'' after ``(a)''; and
(2) by adding at the end the following:
``(2) If the debtor is an individual in a case under chapter 7 or
13, such value with respect to personal property securing an allowed
claim shall be determined based on the replacement value of such
property as of the date of the filing of the petition without deduction
for costs of sale or marketing. With respect to property acquired for
personal, family, or household purposes, replacement value shall mean
the price a retail merchant would charge for property of that kind
considering the age and condition of the property at the time value is
determined.''.
SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.
(a) Executory Contracts and Unexpired Leases.--Section 365 of title
11, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (1)(A), by striking the semicolon at the
end and inserting the following: ``other than a default that is
a breach of a provision relating to the satisfaction of any
provision (other than a penalty rate or penalty provision)
relating to a default arising from any failure to perform
nonmonetary obligations under an unexpired lease of real
property, if it is impossible for the trustee to cure such
default by performing nonmonetary acts at and after the time of
assumption, except that if such default arises from a failure
to operate in accordance with a nonresidential real property
lease, then such default shall be cured by performance at and
after the time of assumption in accordance with such lease, and
pecuniary losses resulting from such default shall be
compensated in accordance with the provisions of this
paragraph;''; and
(B) in paragraph (2)(D), by striking ``penalty rate or
provision'' and inserting ``penalty rate or penalty
provision'';
(2) in subsection (c)--
(A) in paragraph (2), by inserting ``or'' at the end;
(B) in paragraph (3), by striking ``; or'' at the end and
inserting a period; and
(C) by striking paragraph (4);
(3) in subsection (d)--
(A) by striking paragraphs (5) through (9); and
(B) by redesignating paragraph (10) as paragraph (5); and
(4) in subsection (f)(1) by striking ``; except that'' and all
that follows through the end of the paragraph and inserting a
period.
(b) Impairment of Claims or Interests.--Section 1124(2) of title
11, United States Code, is amended--
(1) in subparagraph (A), by inserting ``or of a kind that
section 365(b)(2) expressly does not require to be cured'' before
the semicolon at the end;
(2) in subparagraph (C), by striking ``and'' at the end;
(3) by redesignating subparagraph (D) as subparagraph (E); and
(4) by inserting after subparagraph (C) the following:
``(D) if such claim or such interest arises from any
failure to perform a nonmonetary obligation, other than a
default arising from failure to operate a nonresidential real
property lease subject to section 365(b)(1)(A), compensates the
holder of such claim or such interest (other than the debtor or
an insider) for any actual pecuniary loss incurred by such
holder as a result of such failure; and''.
SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.
Section 503(b)(1)(A) of title 11, United States Code, is amended to
read as follows:
``(A) the actual, necessary costs and expenses of preserving the
estate including--
``(i) wages, salaries, and commissions for services
rendered after the commencement of the case; and
``(ii) wages and benefits awarded pursuant to a judicial
proceeding or a proceeding of the National Labor Relations
Board as back pay attributable to any period of time occurring
after commencement of the case under this title, as a result of
a violation of Federal or State law by the debtor, without
regard to the time of the occurrence of unlawful conduct on
which such award is based or to whether any services were
rendered, if the court determines that payment of wages and
benefits by reason of the operation of this clause will not
substantially increase the probability of layoff or termination
of current employees, or of nonpayment of domestic support
obligations, during the case under this title;''.
SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF CERTAIN PROCEEDINGS.
(a) Chapter 7.--Section 727(a) of title 11, United States Code, as
amended by section 106, is amended--
(1) in paragraph (10), by striking ``or'' at the end;
(2) in paragraph (11) by striking the period at the end and
inserting ``; or''; and
(3) by inserting after paragraph (11) the following:
``(12) the court after notice and a hearing held not more than
10 days before the date of the entry of the order granting the
discharge finds that there is reasonable cause to believe that--
``(A) section 522(q)(1) may be applicable to the debtor;
and
``(B) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind described
in section 522(q)(1)(B).''.
(b) Chapter 11.--Section 1141(d) of title 11, United States Code,
as amended by section 321, is amended by adding at the end the
following:
``(C) unless after notice and a hearing held not more than 10
days before the date of the entry of the order granting the
discharge, the court finds that there is no reasonable cause to
believe that--
``(i) section 522(q)(1) may be applicable to the debtor;
and
``(ii) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind described
in section 522(q)(1)(B).''.
(c) Chapter 12.--Section 1228 of title 11, United States Code, is
amended--
(1) in subsection (a) by striking ``As'' and inserting
``Subject to subsection (d), as'',
(2) in subsection (b) by striking ``At'' and inserting
``Subject to subsection (d), at'', and
(3) by adding at the end the following:
``(f) The court may not grant a discharge under this chapter unless
the court after notice and a hearing held not more than 10 days before
the date of the entry of the order granting the discharge finds that
there is no reasonable cause to believe that--
``(1) section 522(q)(1) may be applicable to the debtor; and
``(2) there is pending any proceeding in which the debtor may
be found guilty of a felony of the kind described in section
522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).''.
(d) Chapter 13.--Section 1328 of title 11, United States Code, as
amended by section 106, is amended--
(1) in subsection (a) by striking ``As'' and inserting
``Subject to subsection (d), as'',
(2) in subsection (b) by striking ``At'' and inserting
``Subject to subsection (d), at'', and
(3) by adding at the end the following:
``(h) The court may not grant a discharge under this chapter unless
the court after notice and a hearing held not more than 10 days before
the date of the entry of the order granting the discharge finds that
there is no reasonable cause to believe that--
``(1) section 522(q)(1) may be applicable to the debtor; and
``(2) there is pending any proceeding in which the debtor may
be found guilty of a felony of the kind described in section
522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).''.
SEC. 331. LIMITATION ON RETENTION BONUSES, SEVERANCE PAY, AND CERTAIN
OTHER PAYMENTS.
Section 503 of title 11, United States Code, is amended by adding
at the end the following:
``(c) Notwithstanding subsection (b), there shall neither be
allowed, nor paid--
``(1) a transfer made to, or an obligation incurred for the
benefit of, an insider of the debtor for the purpose of inducing
such person to remain with the debtor's business, absent a finding
by the court based on evidence in the record that--
``(A) the transfer or obligation is essential to retention
of the person because the individual has a bona fide job offer
from another business at the same or greater rate of
compensation;
``(B) the services provided by the person are essential to
the survival of the business; and
``(C) either--
``(i) the amount of the transfer made to, or obligation
incurred for the benefit of, the person is not greater than
an amount equal to 10 times the amount of the mean transfer
or obligation of a similar kind given to nonmanagement
employees for any purpose during the calendar year in which
the transfer is made or the obligation is incurred; or
``(ii) if no such similar transfers were made to, or
obligations were incurred for the benefit of, such
nonmanagement employees during such calendar year, the
amount of the transfer or obligation is not greater than an
amount equal to 25 percent of the amount of any similar
transfer or obligation made to or incurred for the benefit
of such insider for any purpose during the calendar year
before the year in which such transfer is made or
obligation is incurred;
``(2) a severance payment to an insider of the debtor, unless--
``(A) the payment is part of a program that is generally
applicable to all full-time employees; and
``(B) the amount of the payment is not greater than 10
times the amount of the mean severance pay given to
nonmanagement employees during the calendar year in which the
payment is made; or
``(3) other transfers or obligations that are outside the
ordinary course of business and not justified by the facts and
circumstances of the case, including transfers made to, or
obligations incurred for the benefit of, officers, managers, or
consultants hired after the date of the filing of the petition.''.
SEC. 332. FRAUDULENT INVOLUNTARY BANKRUPTCY.
(a) Short Title.--This section may be cited as the ``Involuntary
Bankruptcy Improvement Act of 2005''.
(b) Involuntary Cases.--Section 303 of title 11, United States
Code, is amended by adding at the end the following:
``(l)(1) If--
``(A) the petition under this section is false or contains any
materially false, fictitious, or fraudulent statement;
``(B) the debtor is an individual; and
``(C) the court dismisses such petition,
the court, upon the motion of the debtor, shall seal all the records of
the court relating to such petition, and all references to such
petition.
``(2) If the debtor is an individual and the court dismisses a
petition under this section, the court may enter an order prohibiting
all consumer reporting agencies (as defined in section 603(f) of the
Fair Credit Reporting Act (15 U.S.C. 1681a(f))) from making any
consumer report (as defined in section 603(d) of that Act) that
contains any information relating to such petition or to the case
commenced by the filing of such petition.
``(3) Upon the expiration of the statute of limitations described
in section 3282 of title 18, for a violation of section 152 or 157 of
such title, the court, upon the motion of the debtor and for good
cause, may expunge any records relating to a petition filed under this
section.''.
(c) Bankruptcy Fraud.--Section 157 of title 18, United States Code,
is amended by inserting ``, including a fraudulent involuntary
bankruptcy petition under section 303 of such title'' after ``title
11''.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.
(a) Definition.--Section 101 of title 11, United States Code, is
amended by inserting after paragraph (48) the following:
``(48A) `securities self regulatory organization' means either
a securities association registered with the Securities and
Exchange Commission under section 15A of the Securities Exchange
Act of 1934 or a national securities exchange registered with the
Securities and Exchange Commission under section 6 of the
Securities Exchange Act of 1934;''.
(b) Automatic Stay.--Section 362(b) of title 11, United States
Code, as amended by sections 224, 303, and 311, is amended by inserting
after paragraph (24) the following:
``(25) under subsection (a), of--
``(A) the commencement or continuation of an investigation
or action by a securities self regulatory organization to
enforce such organization's regulatory power;
``(B) the enforcement of an order or decision, other than
for monetary sanctions, obtained in an action by such
securities self regulatory organization to enforce such
organization's regulatory power; or
``(C) any act taken by such securities self regulatory
organization to delist, delete, or refuse to permit quotation
of any stock that does not meet applicable regulatory
requirements;''.
SEC. 402. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.
Section 341 of title 11, United States Code, is amended by adding
at the end the following:
``(e) Notwithstanding subsections (a) and (b), the court, on the
request of a party in interest and after notice and a hearing, for
cause may order that the United States trustee not convene a meeting of
creditors or equity security holders if the debtor has filed a plan as
to which the debtor solicited acceptances prior to the commencement of
the case.''.
SEC. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11,
United States Code, are each amended by striking ``10'' each place it
appears and inserting ``30''.
SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
(a) In General.--Section 365(d)(4) of title 11, United States Code,
is amended to read as follows:
``(4)(A) Subject to subparagraph (B), an unexpired lease of
nonresidential real property under which the debtor is the lessee shall
be deemed rejected, and the trustee shall immediately surrender that
nonresidential real property to the lessor, if the trustee does not
assume or reject the unexpired lease by the earlier of--
``(i) the date that is 120 days after the date of the order for
relief; or
``(ii) the date of the entry of an order confirming a plan.
``(B)(i) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day period, for 90
days on the motion of the trustee or lessor for cause.
``(ii) If the court grants an extension under clause (i), the court
may grant a subsequent extension only upon prior written consent of the
lessor in each instance.''.
(b) Exception.--Section 365(f)(1) of title 11, United States Code,
is amended by striking ``subsection'' the first place it appears and
inserting ``subsections (b) and''.
SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.
(a) Appointment.--Section 1102(a) of title 11, United States Code,
is amended by adding at the end the following:
``(4) On request of a party in interest and after notice and a
hearing, the court may order the United States trustee to change the
membership of a committee appointed under this subsection, if the court
determines that the change is necessary to ensure adequate
representation of creditors or equity security holders. The court may
order the United States trustee to increase the number of members of a
committee to include a creditor that is a small business concern (as
described in section 3(a)(1) of the Small Business Act), if the court
determines that the creditor holds claims (of the kind represented by
the committee) the aggregate amount of which, in comparison to the
annual gross revenue of that creditor, is disproportionately large.''.
(b) Information.--Section 1102(b) of title 11, United States Code,
is amended by adding at the end the following:
``(3) A committee appointed under subsection (a) shall--
``(A) provide access to information for creditors who--
``(i) hold claims of the kind represented by that
committee; and
``(ii) are not appointed to the committee;
``(B) solicit and receive comments from the creditors described
in subparagraph (A); and
``(C) be subject to a court order that compels any additional
report or disclosure to be made to the creditors described in
subparagraph (A).''.
SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.
Section 546 of title 11, United States Code, is amended--
(1) by redesignating the second subsection (g) (as added by
section 222(a) of Public Law 103-394) as subsection (h);
(2) in subsection (h), as so redesignated, by inserting ``and
subject to the prior rights of holders of security interests in
such goods or the proceeds of such goods'' after ``consent of a
creditor''; and
(3) by adding at the end the following:
``(i)(1) Notwithstanding paragraphs (2) and (3) of section 545, the
trustee may not avoid a warehouseman's lien for storage,
transportation, or other costs incidental to the storage and handling
of goods.
``(2) The prohibition under paragraph (1) shall be applied in a
manner consistent with any State statute applicable to such lien that
is similar to section 7-209 of the Uniform Commercial Code, as in
effect on the date of enactment of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005, or any successor to such section 7-
209.''.
SEC. 407. AMENDMENTS TO SECTION 330(A) OF TITLE 11, UNITED STATES CODE.
Section 330(a) of title 11, United States Code, is amended--
(1) in paragraph (3)--
(A) by striking ``(A) In'' and inserting ``In''; and
(B) by inserting ``to an examiner, trustee under chapter
11, or professional person'' after ``awarded''; and
(2) by adding at the end the following:
``(7) In determining the amount of reasonable compensation to be
awarded to a trustee, the court shall treat such compensation as a
commission, based on section 326.''.
SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION.
Section 1125 of title 11, United States Code, is amended by adding
at the end the following:
``(g) Notwithstanding subsection (b), an acceptance or rejection of
the plan may be solicited from a holder of a claim or interest if such
solicitation complies with applicable nonbankruptcy law and if such
holder was solicited before the commencement of the case in a manner
complying with applicable nonbankruptcy law.''.
SEC. 409. PREFERENCES.
Section 547(c) of title 11, United States Code, is amended--
(1) by striking paragraph (2) and inserting the following:
``(2) to the extent that such transfer was in payment of a debt
incurred by the debtor in the ordinary course of business or
financial affairs of the debtor and the transferee, and such
transfer was--
``(A) made in the ordinary course of business or financial
affairs of the debtor and the transferee; or
``(B) made according to ordinary business terms;'';
(2) in paragraph (8), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(9) if, in a case filed by a debtor whose debts are not
primarily consumer debts, the aggregate value of all property that
constitutes or is affected by such transfer is less than $5,000.''.
SEC. 410. VENUE OF CERTAIN PROCEEDINGS.
Section 1409(b) of title 28, United States Code, is amended by
inserting ``, or a debt (excluding a consumer debt) against a
noninsider of less than $10,000,'' after ``$5,000''. Section 1409(b) of
title 28, United States Code, is further amended by striking ``$5,000''
and inserting ``$15,000''.
SEC. 411. PERIOD FOR FILING PLAN UNDER CHAPTER 11.
Section 1121(d) of title 11, United States Code, is amended--
(1) by striking ``On'' and inserting ``(1) Subject to paragraph
(2), on''; and
(2) by adding at the end the following:
``(2)(A) The 120-day period specified in paragraph (1) may not be
extended beyond a date that is 18 months after the date of the order
for relief under this chapter.
``(B) The 180-day period specified in paragraph (1) may not be
extended beyond a date that is 20 months after the date of the order
for relief under this chapter.''.
SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.
Section 523(a)(16) of title 11, United States Code, is amended--
(1) by striking ``dwelling'' the first place it appears;
(2) by striking ``ownership or'' and inserting ``ownership,'';
(3) by striking ``housing'' the first place it appears; and
(4) by striking ``but only'' and all that follows through
``such period,'' and inserting ``or a lot in a homeowners
association, for as long as the debtor or the trustee has a legal,
equitable, or possessory ownership interest in such unit, such
corporation, or such lot,''.
SEC. 413. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.
Section 341(c) of title 11, United States Code, is amended by
inserting at the end the following: ``Notwithstanding any local court
rule, provision of a State constitution, any otherwise applicable
nonbankruptcy law, or any other requirement that representation at the
meeting of creditors under subsection (a) be by an attorney, a creditor
holding a consumer debt or any representative of the creditor (which
may include an entity or an employee of an entity and may be a
representative for more than 1 creditor) shall be permitted to appear
at and participate in the meeting of creditors in a case under chapter
7 or 13, either alone or in conjunction with an attorney for the
creditor. Nothing in this subsection shall be construed to require any
creditor to be represented by an attorney at any meeting of
creditors.''.
SEC. 414. DEFINITION OF DISINTERESTED PERSON.
Section 101(14) of title 11, United States Code, is amended to read
as follows:
``(14) `disinterested person' means a person that--
``(A) is not a creditor, an equity security holder, or an
insider;
``(B) is not and was not, within 2 years before the date of
the filing of the petition, a director, officer, or employee of
the debtor; and
``(C) does not have an interest materially adverse to the
interest of the estate or of any class of creditors or equity
security holders, by reason of any direct or indirect
relationship to, connection with, or interest in, the debtor,
or for any other reason;''.
SEC. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.
Section 330(a)(3) of title 11, United States Code, is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) by redesignating subparagraph (E) as subparagraph (F); and
(3) by inserting after subparagraph (D) the following:
``(E) with respect to a professional person, whether the person
is board certified or otherwise has demonstrated skill and
experience in the bankruptcy field; and''.
SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.
Section 1104(b) of title 11, United States Code, is amended--
(1) by inserting ``(1)'' after ``(b)''; and
(2) by adding at the end the following:
``(2)(A) If an eligible, disinterested trustee is elected at a
meeting of creditors under paragraph (1), the United States trustee
shall file a report certifying that election.
``(B) Upon the filing of a report under subparagraph (A)--
``(i) the trustee elected under paragraph (1) shall be
considered to have been selected and appointed for purposes of this
section; and
``(ii) the service of any trustee appointed under subsection
(d) shall terminate.
``(C) The court shall resolve any dispute arising out of an
election described in subparagraph (A).''.
SEC. 417. UTILITY SERVICE.
Section 366 of title 11, United States Code, is amended--
(1) in subsection (a), by striking ``subsection (b)'' and
inserting ``subsections (b) and (c)''; and
(2) by adding at the end the following:
``(c)(1)(A) For purposes of this subsection, the term `assurance of
payment' means--
``(i) a cash deposit;
``(ii) a letter of credit;
``(iii) a certificate of deposit;
``(iv) a surety bond;
``(v) a prepayment of utility consumption; or
``(vi) another form of security that is mutually agreed on
between the utility and the debtor or the trustee.
``(B) For purposes of this subsection an administrative expense
priority shall not constitute an assurance of payment.
``(2) Subject to paragraphs (3) and (4), with respect to a case
filed under chapter 11, a utility referred to in subsection (a) may
alter, refuse, or discontinue utility service, if during the 30-day
period beginning on the date of the filing of the petition, the utility
does not receive from the debtor or the trustee adequate assurance of
payment for utility service that is satisfactory to the utility.
``(3)(A) On request of a party in interest and after notice and a
hearing, the court may order modification of the amount of an assurance
of payment under paragraph (2).
``(B) In making a determination under this paragraph whether an
assurance of payment is adequate, the court may not consider--
``(i) the absence of security before the date of the filing of
the petition;
``(ii) the payment by the debtor of charges for utility service
in a timely manner before the date of the filing of the petition;
or
``(iii) the availability of an administrative expense priority.
``(4) Notwithstanding any other provision of law, with respect to a
case subject to this subsection, a utility may recover or set off
against a security deposit provided to the utility by the debtor before
the date of the filing of the petition without notice or order of the
court.''.
SEC. 418. BANKRUPTCY FEES.
Section 1930 of title 28, United States Code, is amended--
(1) in subsection (a), by striking ``Notwithstanding section
1915 of this title, the'' and inserting ``The''; and
(2) by adding at the end the following:
``(f)(1) Under the procedures prescribed by the Judicial Conference
of the United States, the district court or the bankruptcy court may
waive the filing fee in a case under chapter 7 of title 11 for an
individual if the court determines that such individual has income less
than 150 percent of the income official poverty line (as defined by the
Office of Management and Budget, and revised annually in accordance
with section 673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved and is unable to pay that
fee in installments. For purposes of this paragraph, the term `filing
fee' means the filing fee required by subsection (a), or any other fee
prescribed by the Judicial Conference under subsections (b) and (c)
that is payable to the clerk upon the commencement of a case under
chapter 7.
``(2) The district court or the bankruptcy court may waive for such
debtors other fees prescribed under subsections (b) and (c).
``(3) This subsection does not restrict the district court or the
bankruptcy court from waiving, in accordance with Judicial Conference
policy, fees prescribed under this section for other debtors and
creditors.''.
SEC. 419. MORE COMPLETE INFORMATION REGARDING ASSETS OF THE ESTATE.
(a) In General.--
(1) Disclosure.--The Judicial Conference of the United States,
in accordance with section 2075 of title 28 of the United States
Code and after consideration of the views of the Director of the
Executive Office for United States Trustees, shall propose amended
Federal Rules of Bankruptcy Procedure and in accordance with rule
9009 of the Federal Rules of Bankruptcy Procedure shall prescribe
official bankruptcy forms directing debtors under chapter 11 of
title 11 of United States Code, to disclose the information
described in paragraph (2) by filing and serving periodic financial
and other reports designed to provide such information.
(2) Information.--The information referred to in paragraph (1)
is the value, operations, and profitability of any closely held
corporation, partnership, or of any other entity in which the
debtor holds a substantial or controlling interest.
(b) Purpose.--The purpose of the rules and reports under subsection
(a) shall be to assist parties in interest taking steps to ensure that
the debtor's interest in any entity referred to in subsection (a)(2) is
used for the payment of allowed claims against debtor.
Subtitle B--Small Business Bankruptcy Provisions
SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125 of title 11, United States Code, is amended--
(1) in subsection (a)(1), by inserting before the semicolon
``and in determining whether a disclosure statement provides
adequate information, the court shall consider the complexity of
the case, the benefit of additional information to creditors and
other parties in interest, and the cost of providing additional
information''; and
(2) by striking subsection (f), and inserting the following:
``(f) Notwithstanding subsection (b), in a small business case--
``(1) the court may determine that the plan itself provides
adequate information and that a separate disclosure statement is
not necessary;
``(2) the court may approve a disclosure statement submitted on
standard forms approved by the court or adopted under section 2075
of title 28; and
``(3)(A) the court may conditionally approve a disclosure
statement subject to final approval after notice and a hearing;
``(B) acceptances and rejections of a plan may be solicited
based on a conditionally approved disclosure statement if the
debtor provides adequate information to each holder of a claim or
interest that is solicited, but a conditionally approved disclosure
statement shall be mailed not later than 25 days before the date of
the hearing on confirmation of the plan; and
``(C) the hearing on the disclosure statement may be combined
with the hearing on confirmation of a plan.''.
SEC. 432. DEFINITIONS.
(a) Definitions.--Section 101 of title 11, United States Code, is
amended by striking paragraph (51C) and inserting the following:
``(51C) `small business case' means a case filed under chapter
11 of this title in which the debtor is a small business debtor;
``(51D) `small business debtor'--
``(A) subject to subparagraph (B), means a person engaged
in commercial or business activities (including any affiliate
of such person that is also a debtor under this title and
excluding a person whose primary activity is the business of
owning or operating real property or activities incidental
thereto) that has aggregate noncontingent liquidated secured
and unsecured debts as of the date of the petition or the date
of the order for relief in an amount not more than $2,000,000
(excluding debts owed to 1 or more affiliates or insiders) for
a case in which the United States trustee has not appointed
under section 1102(a)(1) a committee of unsecured creditors or
where the court has determined that the committee of unsecured
creditors is not sufficiently active and representative to
provide effective oversight of the debtor; and
``(B) does not include any member of a group of affiliated
debtors that has aggregate noncontingent liquidated secured and
unsecured debts in an amount greater than $2,000,000 (excluding
debt owed to 1 or more affiliates or insiders);''.
(b) Conforming Amendment.--Section 1102(a)(3) of title 11, United
States Code, is amended by inserting ``debtor'' after ``small
business''.
(c) Adjustment of Dollar Amounts.--Section 104(b) of title 11,
United States Code, as amended by section 226, is amended by inserting
``101(51D),'' after ``101(3),'' each place it appears.
SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
Within a reasonable period of time after the date of enactment of
this Act, the Judicial Conference of the United States shall prescribe
in accordance with rule 9009 of the Federal Rules of Bankruptcy
Procedure official standard form disclosure statements and plans of
reorganization for small business debtors (as defined in section 101 of
title 11, United States Code, as amended by this Act), designed to
achieve a practical balance between--
(1) the reasonable needs of the courts, the United States
trustee, creditors, and other parties in interest for reasonably
complete information; and
(2) economy and simplicity for debtors.
SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(a) Reporting Required.--
(1) In general.--Chapter 3 of title 11, United States Code, is
amended by inserting after section 307 the following:
``Sec. 308. Debtor reporting requirements
``(a) For purposes of this section, the term `profitability' means,
with respect to a debtor, the amount of money that the debtor has
earned or lost during current and recent fiscal periods.
``(b) A small business debtor shall file periodic financial and
other reports containing information including--
``(1) the debtor's profitability;
``(2) reasonable approximations of the debtor's projected cash
receipts and cash disbursements over a reasonable period;
``(3) comparisons of actual cash receipts and disbursements
with projections in prior reports;
``(4)(A) whether the debtor is--
``(i) in compliance in all material respects with
postpetition requirements imposed by this title and the Federal
Rules of Bankruptcy Procedure; and
``(ii) timely filing tax returns and other required
government filings and paying taxes and other administrative
expenses when due;
``(B) if the debtor is not in compliance with the requirements
referred to in subparagraph (A)(i) or filing tax returns and other
required government filings and making the payments referred to in
subparagraph (A)(ii), what the failures are and how, at what cost,
and when the debtor intends to remedy such failures; and
``(C) such other matters as are in the best interests of the
debtor and creditors, and in the public interest in fair and
efficient procedures under chapter 11 of this title.''.
(2) Clerical amendment.--The table of sections for chapter 3 of
title 11, United States Code, is amended by inserting after the
item relating to section 307 the following:
``308. Debtor reporting requirements.''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect 60 days after the date on which rules are prescribed under
section 2075 of title 28, United States Code, to establish forms to be
used to comply with section 308 of title 11, United States Code, as
added by subsection (a).
SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) Proposal of Rules and Forms.--The Judicial Conference of the
United States shall propose in accordance with section 2073 of title 28
of the United States Code amended Federal Rules of Bankruptcy
Procedure, and shall prescribe in accordance with rule 9009 of the
Federal Rules of Bankruptcy Procedure official bankruptcy forms,
directing small business debtors to file periodic financial and other
reports containing information, including information relating to--
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements; and
(3) whether the debtor is timely filing tax returns and paying
taxes and other administrative expenses when due.
(b) Purpose.--The rules and forms proposed under subsection (a)
shall be designed to achieve a practical balance among--
(1) the reasonable needs of the bankruptcy court, the United
States trustee, creditors, and other parties in interest for
reasonably complete information;
(2) a small business debtor's interest that required reports be
easy and inexpensive to complete; and
(3) the interest of all parties that the required reports help
such debtor to understand such debtor's financial condition and
plan the such debtor's future.
SEC. 436. DUTIES IN SMALL BUSINESS CASES.
(a) Duties in Chapter 11 Cases.--Subchapter I of chapter 11 of
title 11, United States Code, as amended by section 321, is amended by
adding at the end the following:
``Sec. 1116. Duties of trustee or debtor in possession in small
business cases
``In a small business case, a trustee or the debtor in possession,
in addition to the duties provided in this title and as otherwise
required by law, shall--
``(1) append to the voluntary petition or, in an involuntary
case, file not later than 7 days after the date of the order for
relief--
``(A) its most recent balance sheet, statement of
operations, cash-flow statement, and Federal income tax return;
or
``(B) a statement made under penalty of perjury that no
balance sheet, statement of operations, or cash-flow statement
has been prepared and no Federal tax return has been filed;
``(2) attend, through its senior management personnel and
counsel, meetings scheduled by the court or the United States
trustee, including initial debtor interviews, scheduling
conferences, and meetings of creditors convened under section 341
unless the court, after notice and a hearing, waives that
requirement upon a finding of extraordinary and compelling
circumstances;
``(3) timely file all schedules and statements of financial
affairs, unless the court, after notice and a hearing, grants an
extension, which shall not extend such time period to a date later
than 30 days after the date of the order for relief, absent
extraordinary and compelling circumstances;
``(4) file all postpetition financial and other reports
required by the Federal Rules of Bankruptcy Procedure or by local
rule of the district court;
``(5) subject to section 363(c)(2), maintain insurance
customary and appropriate to the industry;
``(6)(A) timely file tax returns and other required government
filings; and
``(B) subject to section 363(c)(2), timely pay all taxes
entitled to administrative expense priority except those being
contested by appropriate proceedings being diligently prosecuted;
and
``(7) allow the United States trustee, or a designated
representative of the United States trustee, to inspect the
debtor's business premises, books, and records at reasonable times,
after reasonable prior written notice, unless notice is waived by
the debtor.''.
(b) Clerical Amendment.--The table of sections for chapter 11 of
title 11, United States Code, as amended by section 321, is amended by
inserting after the item relating to section 1115 the following:
``1116. Duties of trustee or debtor in possession in small business
cases.''.
SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121 of title 11, United States Code, is amended by
striking subsection (e) and inserting the following:
``(e) In a small business case--
``(1) only the debtor may file a plan until after 180 days
after the date of the order for relief, unless that period is--
``(A) extended as provided by this subsection, after notice
and a hearing; or
``(B) the court, for cause, orders otherwise;
``(2) the plan and a disclosure statement (if any) shall be
filed not later than 300 days after the date of the order for
relief; and
``(3) the time periods specified in paragraphs (1) and (2), and
the time fixed in section 1129(e) within which the plan shall be
confirmed, may be extended only if--
``(A) the debtor, after providing notice to parties in
interest (including the United States trustee), demonstrates by
a preponderance of the evidence that it is more likely than not
that the court will confirm a plan within a reasonable period
of time;
``(B) a new deadline is imposed at the time the extension
is granted; and
``(C) the order extending time is signed before the
existing deadline has expired.''.
SEC. 438. PLAN CONFIRMATION DEADLINE.
Section 1129 of title 11, United States Code, is amended by adding
at the end the following:
``(e) In a small business case, the court shall confirm a plan that
complies with the applicable provisions of this title and that is filed
in accordance with section 1121(e) not later than 45 days after the
plan is filed unless the time for confirmation is extended in
accordance with section 1121(e)(3).''.
SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.
Section 586(a) of title 28, United States Code, is amended--
(1) in paragraph (3)--
(A) in subparagraph (G), by striking ``and'' at the end;
(B) by redesignating subparagraph (H) as subparagraph (I);
and
(C) by inserting after subparagraph (G) the following:
``(H) in small business cases (as defined in section 101 of
title 11), performing the additional duties specified in title
11 pertaining to such cases; and'';
(2) in paragraph (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(4) by adding at the end the following:
``(7) in each of such small business cases--
``(A) conduct an initial debtor interview as soon as
practicable after the date of the order for relief but before
the first meeting scheduled under section 341(a) of title 11,
at which time the United States trustee shall--
``(i) begin to investigate the debtor's viability;
``(ii) inquire about the debtor's business plan;
``(iii) explain the debtor's obligations to file
monthly operating reports and other required reports;
``(iv) attempt to develop an agreed scheduling order;
and
``(v) inform the debtor of other obligations;
``(B) if determined to be appropriate and advisable, visit
the appropriate business premises of the debtor, ascertain the
state of the debtor's books and records, and verify that the
debtor has filed its tax returns; and
``(C) review and monitor diligently the debtor's
activities, to identify as promptly as possible whether the
debtor will be unable to confirm a plan; and
``(8) in any case in which the United States trustee finds
material grounds for any relief under section 1112 of title 11, the
United States trustee shall apply promptly after making that
finding to the court for relief.''.
SEC. 440. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is amended--
(1) in the matter preceding paragraph (1), by striking ``,
may''; and
(2) by striking paragraph (1) and inserting the following:
``(1) shall hold such status conferences as are necessary to
further the expeditious and economical resolution of the case;
and''.
SEC. 441. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, as amended by sections
106, 305, and 311, is amended--
(1) in subsection (k), as so redesignated by section 305--
(A) by striking ``An'' and inserting ``(1) Except as
provided in paragraph (2), an''; and
(B) by adding at the end the following:
``(2) If such violation is based on an action taken by an entity in
the good faith belief that subsection (h) applies to the debtor, the
recovery under paragraph (1) of this subsection against such entity
shall be limited to actual damages.''; and
(2) by adding at the end the following:
``(n)(1) Except as provided in paragraph (2), subsection (a) does
not apply in a case in which the debtor--
``(A) is a debtor in a small business case pending at the time
the petition is filed;
``(B) was a debtor in a small business case that was dismissed
for any reason by an order that became final in the 2-year period
ending on the date of the order for relief entered with respect to
the petition;
``(C) was a debtor in a small business case in which a plan was
confirmed in the 2-year period ending on the date of the order for
relief entered with respect to the petition; or
``(D) is an entity that has acquired substantially all of the
assets or business of a small business debtor described in
subparagraph (A), (B), or (C), unless such entity establishes by a
preponderance of the evidence that such entity acquired
substantially all of the assets or business of such small business
debtor in good faith and not for the purpose of evading this
paragraph.
``(2) Paragraph (1) does not apply--
``(A) to an involuntary case involving no collusion by the
debtor with creditors; or
``(B) to the filing of a petition if--
``(i) the debtor proves by a preponderance of the evidence
that the filing of the petition resulted from circumstances
beyond the control of the debtor not foreseeable at the time
the case then pending was filed; and
``(ii) it is more likely than not that the court will
confirm a feasible plan, but not a liquidating plan, within a
reasonable period of time.''.
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT
OF TRUSTEE.
(a) Expanded Grounds for Dismissal or Conversion.--Section 1112 of
title 11, United States Code, is amended by striking subsection (b) and
inserting the following:
``(b)(1) Except as provided in paragraph (2) of this subsection,
subsection (c) of this section, and section 1104(a)(3), on request of a
party in interest, and after notice and a hearing, absent unusual
circumstances specifically identified by the court that establish that
the requested conversion or dismissal is not in the best interests of
creditors and the estate, the court shall convert a case under this
chapter to a case under chapter 7 or dismiss a case under this chapter,
whichever is in the best interests of creditors and the estate, if the
movant establishes cause.
``(2) The relief provided in paragraph (1) shall not be granted
absent unusual circumstances specifically identified by the court that
establish that such relief is not in the best interests of creditors
and the estate, if the debtor or another party in interest objects and
establishes that--
``(A) there is a reasonable likelihood that a plan will be
confirmed within the timeframes established in sections 1121(e) and
1129(e) of this title, or if such sections do not apply, within a
reasonable period of time; and
``(B) the grounds for granting such relief include an act or
omission of the debtor other than under paragraph (4)(A)--
``(i) for which there exists a reasonable justification for
the act or omission; and
``(ii) that will be cured within a reasonable period of
time fixed by the court.
``(3) The court shall commence the hearing on a motion under this
subsection not later than 30 days after filing of the motion, and shall
decide the motion not later than 15 days after commencement of such
hearing, unless the movant expressly consents to a continuance for a
specific period of time or compelling circumstances prevent the court
from meeting the time limits established by this paragraph.
``(4) For purposes of this subsection, the term `cause' includes--
``(A) substantial or continuing loss to or diminution of the
estate and the absence of a reasonable likelihood of
rehabilitation;
``(B) gross mismanagement of the estate;
``(C) failure to maintain appropriate insurance that poses a
risk to the estate or to the public;
``(D) unauthorized use of cash collateral substantially harmful
to 1 or more creditors;
``(E) failure to comply with an order of the court;
``(F) unexcused failure to satisfy timely any filing or
reporting requirement established by this title or by any rule
applicable to a case under this chapter;
``(G) failure to attend the meeting of creditors convened under
section 341(a) or an examination ordered under rule 2004 of the
Federal Rules of Bankruptcy Procedure without good cause shown by
the debtor;
``(H) failure timely to provide information or attend meetings
reasonably requested by the United States trustee (or the
bankruptcy administrator, if any);
``(I) failure timely to pay taxes owed after the date of the
order for relief or to file tax returns due after the date of the
order for relief;
``(J) failure to file a disclosure statement, or to file or
confirm a plan, within the time fixed by this title or by order of
the court;
``(K) failure to pay any fees or charges required under chapter
123 of title 28;
``(L) revocation of an order of confirmation under section
1144;
``(M) inability to effectuate substantial consummation of a
confirmed plan;
``(N) material default by the debtor with respect to a
confirmed plan;
``(O) termination of a confirmed plan by reason of the
occurrence of a condition specified in the plan; and
``(P) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the filing
of the petition.''.
(b) Additional Grounds for Appointment of Trustee.--Section 1104(a)
of title 11, United States Code, is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(3) if grounds exist to convert or dismiss the case under
section 1112, but the court determines that the appointment of a
trustee or an examiner is in the best interests of creditors and
the estate.''.
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE, WITH
RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of enactment of this Act, the
Administrator of the Small Business Administration, in consultation
with the Attorney General, the Director of the Executive Office for
United States Trustees, and the Director of the Administrative Office
of the United States Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that cause small
businesses, especially sole proprietorships, to become debtors
in cases under title 11, United States Code, and that cause
certain small businesses to successfully complete cases under
chapter 11 of such title; and
(B) how Federal laws relating to bankruptcy may be made
more effective and efficient in assisting small businesses to
remain viable; and
(2) submit to the President pro tempore of the Senate and the
Speaker of the House of Representatives a report summarizing that
study.
SEC. 444. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is amended--
(1) by inserting ``or 30 days after the court determines that
the debtor is subject to this paragraph, whichever is later'' after
``90-day period)''; and
(2) by striking subparagraph (B) and inserting the following:
``(B) the debtor has commenced monthly payments that--
``(i) may, in the debtor's sole discretion,
notwithstanding section 363(c)(2), be made from rents or
other income generated before, on, or after the date of the
commencement of the case by or from the property to each
creditor whose claim is secured by such real estate (other
than a claim secured by a judgment lien or by an unmatured
statutory lien); and
``(ii) are in an amount equal to interest at the then
applicable nondefault contract rate of interest on the
value of the creditor's interest in the real estate; or''.
SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(7) with respect to a nonresidential real property lease
previously assumed under section 365, and subsequently rejected, a
sum equal to all monetary obligations due, excluding those arising
from or relating to a failure to operate or a penalty provision,
for the period of 2 years following the later of the rejection date
or the date of actual turnover of the premises, without reduction
or setoff for any reason whatsoever except for sums actually
received or to be received from an entity other than the debtor,
and the claim for remaining sums due for the balance of the term of
the lease shall be a claim under section 502(b)(6);''.
SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A PLAN ADMINISTRATOR
OF AN EMPLOYEE BENEFIT PLAN.
(a) In General.--Section 521(a) of title 11, United States Code, as
amended by sections 106 and 304, 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 after paragraph (6) the following:
``(7) unless a trustee is serving in the case, continue to
perform the obligations required of the administrator (as defined
in section 3 of the Employee Retirement Income Security Act of
1974) of an employee benefit plan if at the time of the
commencement of the case the debtor (or any entity designated by
the debtor) served as such administrator.''.
(b) Duties of Trustees.--Section 704(a) of title 11, United States
Code, as amended by sections 102 and 219, is amended--
(1) in paragraph (10), by striking ``and'' at the end; and
(2) by adding at the end the following:
``(11) if, at the time of the commencement of the case, the
debtor (or any entity designated by the debtor) served as the
administrator (as defined in section 3 of the Employee Retirement
Income Security Act of 1974) of an employee benefit plan, continue
to perform the obligations required of the administrator; and''.
(c) Conforming Amendment.--Section 1106(a)(1) of title 11, United
States Code, is amended to read as follows:
``(1) perform the duties of the trustee, as specified in
paragraphs (2), (5), (7), (8), (9), (10), and (11) of section
704;''.
SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.
Section 1114(d) of title 11, United States Code, is amended--
(1) by striking ``appoint'' and inserting ``order the
appointment of'', and
(2) by adding at the end the following: ``The United States
trustee shall appoint any such committee.''.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.
(a) Technical Amendment Relating to Municipalities.--Section 921(d)
of title 11, United States Code, is amended by inserting
``notwithstanding section 301(b)'' before the period at the end.
(b) Conforming Amendment.--Section 301 of title 11, United States
Code, is amended--
(1) by inserting ``(a)'' before ``A voluntary''; and
(2) by striking the last sentence and inserting the following:
``(b) The commencement of a voluntary case under a chapter of this
title constitutes an order for relief under such chapter.''.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.
Section 901(a) of title 11, United States Code, is amended--
(1) by inserting ``555, 556,'' after ``553,''; and
(2) by inserting ``559, 560, 561, 562,'' after ``557,''.
TITLE VI--BANKRUPTCY DATA
SEC. 601. IMPROVED BANKRUPTCY STATISTICS.
(a) In General.--Chapter 6 of title 28, United States Code, is
amended by adding at the end the following:
``Sec. 159. Bankruptcy statistics
``(a) The clerk of the district court, or the clerk of the
bankruptcy court if one is certified pursuant to section 156(b) of this
title, shall collect statistics regarding debtors who are individuals
with primarily consumer debts seeking relief under chapters 7, 11, and
13 of title 11. Those statistics shall be in a standardized format
prescribed by the Director of the Administrative Office of the United
States Courts (referred to in this section as the `Director').
``(b) The Director shall--
``(1) compile the statistics referred to in subsection (a);
``(2) make the statistics available to the public; and
``(3) not later than July 1, 2008, and annually thereafter,
prepare, and submit to Congress a report concerning the information
collected under subsection (a) that contains an analysis of the
information.
``(c) The compilation required under subsection (b) shall--
``(1) be itemized, by chapter, with respect to title 11;
``(2) be presented in the aggregate and for each district; and
``(3) include information concerning--
``(A) the total assets and total liabilities of the debtors
described in subsection (a), and in each category of assets and
liabilities, as reported in the schedules prescribed pursuant
to section 2075 of this title and filed by debtors;
``(B) the current monthly income, average income, and
average expenses of debtors as reported on the schedules and
statements that each such debtor files under sections 521 and
1322 of title 11;
``(C) the aggregate amount of debt discharged in cases
filed during the reporting period, determined as the difference
between the total amount of debt and obligations of a debtor
reported on the schedules and the amount of such debt reported
in categories which are predominantly nondischargeable;
``(D) the average period of time between the date of the
filing of the petition and the closing of the case for cases
closed during the reporting period;
``(E) for cases closed during the reporting period--
``(i) the number of cases in which a reaffirmation
agreement was filed; and
``(ii)(I) the total number of reaffirmation agreements
filed;
``(II) of those cases in which a reaffirmation
agreement was filed, the number of cases in which the
debtor was not represented by an attorney; and
``(III) of those cases in which a reaffirmation
agreement was filed, the number of cases in which the
reaffirmation agreement was approved by the court;
``(F) with respect to cases filed under chapter 13 of title
11, for the reporting period--
``(i)(I) the number of cases in which a final order was
entered determining the value of property securing a claim
in an amount less than the amount of the claim; and
``(II) the number of final orders entered determining
the value of property securing a claim;
``(ii) the number of cases dismissed, the number of
cases dismissed for failure to make payments under the
plan, the number of cases refiled after dismissal, and the
number of cases in which the plan was completed, separately
itemized with respect to the number of modifications made
before completion of the plan, if any; and
``(iii) the number of cases in which the debtor filed
another case during the 6-year period preceding the filing;
``(G) the number of cases in which creditors were fined for
misconduct and any amount of punitive damages awarded by the
court for creditor misconduct; and
``(H) the number of cases in which sanctions under rule
9011 of the Federal Rules of Bankruptcy Procedure were imposed
against debtor's attorney or damages awarded under such
Rule.''.
(b) Clerical Amendment.--The table of sections for chapter 6 of
title 28, United States Code, is amended by adding at the end the
following:
``159. Bankruptcy statistics.''.
(c) Effective Date.--The amendments made by this section shall take
effect 18 months after the date of enactment of this Act.
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) Amendment.--Chapter 39 of title 28, United States Code, is
amended by adding at the end the following:
``Sec. 589b. Bankruptcy data
``(a) Rules.--The Attorney General shall, within a reasonable time
after the effective date of this section, issue rules requiring uniform
forms for (and from time to time thereafter to appropriately modify and
approve)--
``(1) final reports by trustees in cases under chapters 7, 12,
and 13 of title 11; and
``(2) periodic reports by debtors in possession or trustees in
cases under chapter 11 of title 11.
``(b) Reports.--Each report referred to in subsection (a) shall be
designed (and the requirements as to place and manner of filing shall
be established) so as to facilitate compilation of data and maximum
possible access of the public, both by physical inspection at one or
more central filing locations, and by electronic access through the
Internet or other appropriate media.
``(c) Required Information.--The information required to be filed
in the reports referred to in subsection (b) shall be that which is in
the best interests of debtors and creditors, and in the public interest
in reasonable and adequate information to evaluate the efficiency and
practicality of the Federal bankruptcy system. In issuing rules
proposing the forms referred to in subsection (a), the Attorney General
shall strike the best achievable practical balance between--
``(1) the reasonable needs of the public for information about
the operational results of the Federal bankruptcy system;
``(2) economy, simplicity, and lack of undue burden on persons
with a duty to file reports; and
``(3) appropriate privacy concerns and safeguards.
``(d) Final Reports.--The uniform forms for final reports required
under subsection (a) for use by trustees under chapters 7, 12, and 13
of title 11 shall, in addition to such other matters as are required by
law or as the Attorney General in the discretion of the Attorney
General shall propose, include with respect to a case under such
title--
``(1) information about the length of time the case was
pending;
``(2) assets abandoned;
``(3) assets exempted;
``(4) receipts and disbursements of the estate;
``(5) expenses of administration, including for use under
section 707(b), actual costs of administering cases under chapter
13 of title 11;
``(6) claims asserted;
``(7) claims allowed; and
``(8) distributions to claimants and claims discharged without
payment,
in each case by appropriate category and, in cases under chapters 12
and 13 of title 11, date of confirmation of the plan, each modification
thereto, and defaults by the debtor in performance under the plan.
``(e) Periodic Reports.--The uniform forms for periodic reports
required under subsection (a) for use by trustees or debtors in
possession under chapter 11 of title 11 shall, in addition to such
other matters as are required by law or as the Attorney General in the
discretion of the Attorney General shall propose, include--
``(1) information about the industry classification, published
by the Department of Commerce, for the businesses conducted by the
debtor;
``(2) length of time the case has been pending;
``(3) number of full-time employees as of the date of the order
for relief and at the end of each reporting period since the case
was filed;
``(4) cash receipts, cash disbursements and profitability of
the debtor for the most recent period and cumulatively since the
date of the order for relief;
``(5) compliance with title 11, whether or not tax returns and
tax payments since the date of the order for relief have been
timely filed and made;
``(6) all professional fees approved by the court in the case
for the most recent period and cumulatively since the date of the
order for relief (separately reported, for the professional fees
incurred by or on behalf of the debtor, between those that would
have been incurred absent a bankruptcy case and those not); and
``(7) plans of reorganization filed and confirmed and, with
respect thereto, by class, the recoveries of the holders, expressed
in aggregate dollar values and, in the case of claims, as a
percentage of total claims of the class allowed.''.
(b) Clerical Amendment.--The table of sections for chapter 39 of
title 28, United States Code, is amended by adding at the end the
following:
``589b. Bankruptcy data.''.
SEC. 603. AUDIT PROCEDURES.
(a) In General.--
(1) Establishment of procedures.--The Attorney General (in
judicial districts served by United States trustees) and the
Judicial Conference of the United States (in judicial districts
served by bankruptcy administrators) shall establish procedures to
determine the accuracy, veracity, and completeness of petitions,
schedules, and other information that the debtor is required to
provide under sections 521 and 1322 of title 11, United States
Code, and, if applicable, section 111 of such title, in cases filed
under chapter 7 or 13 of such title in which the debtor is an
individual. Such audits shall be in accordance with generally
accepted auditing standards and performed by independent certified
public accountants or independent licensed public accountants,
provided that the Attorney General and the Judicial Conference, as
appropriate, may develop alternative auditing standards not later
than 2 years after the date of enactment of this Act.
(2) Procedures.--Those procedures required by paragraph (1)
shall--
(A) establish a method of selecting appropriate qualified
persons to contract to perform those audits;
(B) establish a method of randomly selecting cases to be
audited, except that not less than 1 out of every 250 cases in
each Federal judicial district shall be selected for audit;
(C) require audits of schedules of income and expenses that
reflect greater than average variances from the statistical
norm of the district in which the schedules were filed if those
variances occur by reason of higher income or higher expenses
than the statistical norm of the district in which the
schedules were filed; and
(D) establish procedures for providing, not less frequently
than annually, public information concerning the aggregate
results of such audits including the percentage of cases, by
district, in which a material misstatement of income or
expenditures is reported.
(b) Amendments.--Section 586 of title 28, United States Code, is
amended--
(1) in subsection (a), by striking paragraph (6) and inserting
the following:
``(6) make such reports as the Attorney General directs,
including the results of audits performed under section 603(a) of
the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005;''; and
(2) by adding at the end the following:
``(f)(1) The United States trustee for each district is authorized
to contract with auditors to perform audits in cases designated by the
United States trustee, in accordance with the procedures established
under section 603(a) of the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005.
``(2)(A) The report of each audit referred to in paragraph (1)
shall be filed with the court and transmitted to the United States
trustee. Each report shall clearly and conspicuously specify any
material misstatement of income or expenditures or of assets identified
by the person performing the audit. In any case in which a material
misstatement of income or expenditures or of assets has been reported,
the clerk of the district court (or the clerk of the bankruptcy court
if one is certified under section 156(b) of this title) shall give
notice of the misstatement to the creditors in the case.
``(B) If a material misstatement of income or expenditures or of
assets is reported, the United States trustee shall--
``(i) report the material misstatement, if appropriate, to the
United States Attorney pursuant to section 3057 of title 18; and
``(ii) if advisable, take appropriate action, including but not
limited to commencing an adversary proceeding to revoke the
debtor's discharge pursuant to section 727(d) of title 11.''.
(c) Amendments to Section 521 of Title 11, U.S.C.--Section 521(a)
of title 11, United States Code, as so designated by section 106, is
amended in each of paragraphs (3) and (4) by inserting ``or an auditor
serving under section 586(f) of title 28'' after ``serving in the
case''.
(d) Amendments to Section 727 of Title 11, U.S.C.--Section 727(d)
of title 11, United States Code, is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) the debtor has failed to explain satisfactorily--
``(A) a material misstatement in an audit referred to in
section 586(f) of title 28; or
``(B) a failure to make available for inspection all
necessary accounts, papers, documents, financial records,
files, and all other papers, things, or property belonging to
the debtor that are requested for an audit referred to in
section 586(f) of title 28.''.
(e) Effective Date.--The amendments made by this section shall take
effect 18 months after the date of enactment of this Act.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY DATA.
It is the sense of Congress that--
(1) the national policy of the United States should be that all
data held by bankruptcy clerks in electronic form, to the extent
such data reflects only public records (as defined in section 107
of title 11, United States Code), should be released in a usable
electronic form in bulk to the public, subject to such appropriate
privacy concerns and safeguards as Congress and the Judicial
Conference of the United States may determine; and
(2) there should be established a bankruptcy data system in
which--
(A) a single set of data definitions and forms are used to
collect data nationwide; and
(B) data for any particular bankruptcy case are aggregated
in the same electronic record.
TITLE VII--BANKRUPTCY TAX PROVISIONS
SEC. 701. TREATMENT OF CERTAIN LIENS.
(a) Treatment of Certain Liens.--Section 724 of title 11, United
States Code, is amended--
(1) in subsection (b), in the matter preceding paragraph (1),
by inserting ``(other than to the extent that there is a properly
perfected unavoidable tax lien arising in connection with an ad
valorem tax on real or personal property of the estate)'' after
``under this title'';
(2) in subsection (b)(2), by inserting ``(except that such
expenses, other than claims for wages, salaries, or commissions
that arise after the date of the filing of the petition, shall be
limited to expenses incurred under chapter 7 of this title and
shall not include expenses incurred under chapter 11 of this
title)'' after ``507(a)(1)''; and
(3) by adding at the end the following:
``(e) Before subordinating a tax lien on real or personal property
of the estate, the trustee shall--
``(1) exhaust the unencumbered assets of the estate; and
``(2) in a manner consistent with section 506(c), recover from
property securing an allowed secured claim the reasonable,
necessary costs and expenses of preserving or disposing of such
property.
``(f) Notwithstanding the exclusion of ad valorem tax liens under
this section and subject to the requirements of subsection (e), the
following may be paid from property of the estate which secures a tax
lien, or the proceeds of such property:
``(1) Claims for wages, salaries, and commissions that are
entitled to priority under section 507(a)(4).
``(2) Claims for contributions to an employee benefit plan
entitled to priority under section 507(a)(5).''.
(b) Determination of Tax Liability.--Section 505(a)(2) of title 11,
United States Code, is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(C) the amount or legality of any amount arising in
connection with an ad valorem tax on real or personal property of
the estate, if the applicable period for contesting or
redetermining that amount under any law (other than a bankruptcy
law) has expired.''.
SEC. 702. TREATMENT OF FUEL TAX CLAIMS.
Section 501 of title 11, United States Code, is amended by adding
at the end the following:
``(e) A claim arising from the liability of a debtor for fuel use
tax assessed consistent with the requirements of section 31705 of title
49 may be filed by the base jurisdiction designated pursuant to the
International Fuel Tax Agreement (as defined in section 31701 of title
49) and, if so filed, shall be allowed as a single claim.''.
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
Section 505(b) of title 11, United States Code, is amended--
(1) in the first sentence, by inserting ``at the address and in
the manner designated in paragraph (1)'' after ``determination of
such tax'';
(2) by striking ``(1) upon payment'' and inserting ``(A) upon
payment'';
(3) by striking ``(A) such governmental unit'' and inserting
``(i) such governmental unit'';
(4) by striking ``(B) such governmental unit'' and inserting
``(ii) such governmental unit'';
(5) by striking ``(2) upon payment'' and inserting ``(B) upon
payment'';
(6) by striking ``(3) upon payment'' and inserting ``(C) upon
payment'';
(7) by striking ``(b)'' and inserting ``(2)''; and
(8) by inserting before paragraph (2), as so designated, the
following:
``(b)(1)(A) The clerk shall maintain a list under which a Federal,
State, or local governmental unit responsible for the collection of
taxes within the district may--
``(i) designate an address for service of requests under this
subsection; and
``(ii) describe where further information concerning additional
requirements for filing such requests may be found.
``(B) If such governmental unit does not designate an address and
provide such address to the clerk under subparagraph (A), any request
made under this subsection may be served at the address for the filing
of a tax return or protest with the appropriate taxing authority of
such governmental unit.''.
SEC. 704. RATE OF INTEREST ON TAX CLAIMS.
(a) In General.--Subchapter I of chapter 5 of title 11, United
States Code, is amended by adding at the end the following:
``Sec. 511. Rate of interest on tax claims
``(a) If any provision of this title requires the payment of
interest on a tax claim or on an administrative expense tax, or the
payment of interest to enable a creditor to receive the present value
of the allowed amount of a tax claim, the rate of interest shall be the
rate determined under applicable nonbankruptcy law.
``(b) In the case of taxes paid under a confirmed plan under this
title, the rate of interest shall be determined as of the calendar
month in which the plan is confirmed.''.
(b) Clerical Amendment.--The table of sections for subchapter I of
chapter 5 of title 11, United States Code, is amended by adding at the
end the following:
``511. Rate of interest on tax claims.''.
SEC. 705. PRIORITY OF TAX CLAIMS.
Section 507(a)(8) of title 11, United States Code, is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by inserting ``for
a taxable year ending on or before the date of the filing of
the petition'' after ``gross receipts'';
(B) in clause (i), by striking ``for a taxable year ending
on or before the date of the filing of the petition''; and
(C) by striking clause (ii) and inserting the following:
``(ii) assessed within 240 days before the date of the
filing of the petition, exclusive of--
``(I) any time during which an offer in compromise
with respect to that tax was pending or in effect
during that 240-day period, plus 30 days; and
``(II) any time during which a stay of proceedings
against collections was in effect in a prior case under
this title during that 240-day period, plus 90 days.'';
and
(2) by adding at the end the following:
``An otherwise applicable time period specified in this paragraph
shall be suspended for any period during which a governmental unit
is prohibited under applicable nonbankruptcy law from collecting a
tax as a result of a request by the debtor for a hearing and an
appeal of any collection action taken or proposed against the
debtor, plus 90 days; plus any time during which the stay of
proceedings was in effect in a prior case under this title or
during which collection was precluded by the existence of 1 or more
confirmed plans under this title, plus 90 days.''.
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code, is amended by
striking ``assessed'' and inserting ``incurred''.
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 13.
Section 1328(a)(2) of title 11, United States Code, as amended by
section 314, is amended by striking ``paragraph'' and inserting
``section 507(a)(8)(C) or in paragraph (1)(B), (1)(C),''.
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 11.
Section 1141(d) of title 11, United States Code, as amended by
sections 321 and 330, is amended by adding at the end the following:
``(6) Notwithstanding paragraph (1), the confirmation of a plan
does not discharge a debtor that is a corporation from any debt--
``(A) of a kind specified in paragraph (2)(A) or (2)(B) of
section 523(a) that is owed to a domestic governmental unit, or
owed to a person as the result of an action filed under subchapter
III of chapter 37 of title 31 or any similar State statute; or
``(B) for a tax or customs duty with respect to which the
debtor--
``(i) made a fraudulent return; or
``(ii) willfully attempted in any manner to evade or to
defeat such tax or such customs duty.''.
SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO PREPETITION TAXES.
Section 362(a)(8) of title 11, United States Code, is amended by
striking ``the debtor'' and inserting ``a corporate debtor's tax
liability for a taxable period the bankruptcy court may determine or
concerning the tax liability of a debtor who is an individual for a
taxable period ending before the date of the order for relief under
this title''.
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.
Section 1129(a)(9) of title 11, United States Code, is amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) in subparagraph (C), by striking ``deferred cash
payments,'' and all that follows through the end of the
subparagraph, and inserting ``regular installment payments in
cash--
``(i) of a total value, as of the effective date of the
plan, equal to the allowed amount of such claim;
``(ii) over a period ending not later than 5 years
after the date of the order for relief under section 301,
302, or 303; and
``(iii) in a manner not less favorable than the most
favored nonpriority unsecured claim provided for by the
plan (other than cash payments made to a class of creditors
under section 1122(b)); and''; and
(3) by adding at the end the following:
``(D) with respect to a secured claim which would otherwise
meet the description of an unsecured claim of a governmental
unit under section 507(a)(8), but for the secured status of
that claim, the holder of that claim will receive on account of
that claim, cash payments, in the same manner and over the same
period, as prescribed in subparagraph (C).''.
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended by
inserting before the semicolon at the end the following: ``, except in
any case in which a purchaser is a purchaser described in section 6323
of the Internal Revenue Code of 1986, or in any other similar provision
of State or local law''.
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.
(a) Payment of Taxes Required.--Section 960 of title 28, United
States Code, is amended--
(1) by inserting ``(a)'' before ``Any''; and
(2) by adding at the end the following:
``(b) A tax under subsection (a) shall be paid on or before the due
date of the tax under applicable nonbankruptcy law, unless--
``(1) the tax is a property tax secured by a lien against
property that is abandoned under section 554 of title 11, within a
reasonable period of time after the lien attaches, by the trustee
in a case under title 11; or
``(2) payment of the tax is excused under a specific provision
of title 11.
``(c) In a case pending under chapter 7 of title 11, payment of a
tax may be deferred until final distribution is made under section 726
of title 11, if--
``(1) the tax was not incurred by a trustee duly appointed or
elected under chapter 7 of title 11; or
``(2) before the due date of the tax, an order of the court
makes a finding of probable insufficiency of funds of the estate to
pay in full the administrative expenses allowed under section
503(b) of title 11 that have the same priority in distribution
under section 726(b) of title 11 as the priority of that tax.''.
(b) Payment of Ad Valorem Taxes Required.--Section 503(b)(1)(B)(i)
of title 11, United States Code, is amended by inserting ``whether
secured or unsecured, including property taxes for which liability is
in rem, in personam, or both,'' before ``except''.
(c) Request for Payment of Administrative Expense Taxes
Eliminated.--Section 503(b)(1) of title 11, United States Code, is
amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) in subparagraph (C), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(D) notwithstanding the requirements of subsection (a), a
governmental unit shall not be required to file a request for the
payment of an expense described in subparagraph (B) or (C), as a
condition of its being an allowed administrative expense;''.
(d) Payment of Taxes and Fees as Secured Claims.--Section 506 of
title 11, United States Code, is amended--
(1) in subsection (b), by inserting ``or State statute'' after
``agreement''; and
(2) in subsection (c), by inserting ``, including the payment
of all ad valorem property taxes with respect to the property''
before the period at the end.
SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is amended by
striking ``before the date on which the trustee commences distribution
under this section;'' and inserting the following: ``on or before the
earlier of--
``(A) the date that is 10 days after the mailing to
creditors of the summary of the trustee's final report; or
``(B) the date on which the trustee commences final
distribution under this section;''.
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a) of title 11, United States Code, as amended by
sections 215 and 224, is amended--
(1) in paragraph (1)(B)--
(A) in the matter preceding clause (i), by inserting ``or
equivalent report or notice,'' after ``a return,'';
(B) in clause (i), by inserting ``or given'' after
``filed''; and
(C) in clause (ii)--
(i) by inserting ``or given'' after ``filed''; and
(ii) by inserting ``, report, or notice'' after
``return''; and
(2) by adding at the end the following:
``For purposes of this subsection, the term `return' means a return
that satisfies the requirements of applicable nonbankruptcy law
(including applicable filing requirements). Such term includes a return
prepared pursuant to section 6020(a) of the Internal Revenue Code of
1986, or similar State or local law, or a written stipulation to a
judgment or a final order entered by a nonbankruptcy tribunal, but does
not include a return made pursuant to section 6020(b) of the Internal
Revenue Code of 1986, or a similar State or local law.''.
SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.
Section 505(b)(2) of title 11, United States Code, as amended by
section 703, is amended by inserting ``the estate,'' after
``misrepresentation,''.
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.
(a) Filing of Prepetition Tax Returns Required for Plan
Confirmation.--Section 1325(a) of title 11, United States Code, as
amended by sections 102, 213, and 306, is amended by inserting after
paragraph (8) the following:
``(9) the debtor has filed all applicable Federal, State, and
local tax returns as required by section 1308.''.
(b) Additional Time Permitted for Filing Tax Returns.--
(1) In general.--Subchapter I of chapter 13 of title 11, United
States Code, is amended by adding at the end the following:
``Sec. 1308. Filing of prepetition tax returns
``(a) Not later than the day before the date on which the meeting
of the creditors is first scheduled to be held under section 341(a), if
the debtor was required to file a tax return under applicable
nonbankruptcy law, the debtor shall file with appropriate tax
authorities all tax returns for all taxable periods ending during the
4-year period ending on the date of the filing of the petition.
``(b)(1) Subject to paragraph (2), if the tax returns required by
subsection (a) have not been filed by the date on which the meeting of
creditors is first scheduled to be held under section 341(a), the
trustee may hold open that meeting for a reasonable period of time to
allow the debtor an additional period of time to file any unfiled
returns, but such additional period of time shall not extend beyond--
``(A) for any return that is past due as of the date of the
filing of the petition, the date that is 120 days after the date of
that meeting; or
``(B) for any return that is not past due as of the date of the
filing of the petition, the later of--
``(i) the date that is 120 days after the date of that
meeting; or
``(ii) the date on which the return is due under the last
automatic extension of time for filing that return to which the
debtor is entitled, and for which request is timely made, in
accordance with applicable nonbankruptcy law.
``(2) After notice and a hearing, and order entered before the
tolling of any applicable filing period determined under this
subsection, if the debtor demonstrates by a preponderance of the
evidence that the failure to file a return as required under this
subsection is attributable to circumstances beyond the control of the
debtor, the court may extend the filing period established by the
trustee under this subsection for--
``(A) a period of not more than 30 days for returns described
in paragraph (1); and
``(B) a period not to extend after the applicable extended due
date for a return described in paragraph (2).
``(c) For purposes of this section, the term `return' includes a
return prepared pursuant to subsection (a) or (b) of section 6020 of
the Internal Revenue Code of 1986, or a similar State or local law, or
a written stipulation to a judgment or a final order entered by a
nonbankruptcy tribunal.''.
(2) Conforming amendment.--The table of sections for subchapter
I of chapter 13 of title 11, United States Code, is amended by
adding at the end the following:
``1308. Filing of prepetition tax returns.''.
(c) Dismissal or Conversion on Failure To Comply.--Section 1307 of
title 11, United States Code, is amended--
(1) by redesignating subsections (e) and (f) as subsections (f)
and (g), respectively; and
(2) by inserting after subsection (d) the following:
``(e) Upon the failure of the debtor to file a tax return under
section 1308, on request of a party in interest or the United States
trustee and after notice and a hearing, the court shall dismiss a case
or convert a case under this chapter to a case under chapter 7 of this
title, whichever is in the best interest of the creditors and the
estate.''.
(d) Timely Filed Claims.--Section 502(b)(9) of title 11, United
States Code, is amended by inserting before the period at the end the
following: ``, and except that in a case under chapter 13, a claim of a
governmental unit for a tax with respect to a return filed under
section 1308 shall be timely if the claim is filed on or before the
date that is 60 days after the date on which such return was filed as
required''.
(e) Rules for Objections to Claims and to Confirmation.--It is the
sense of Congress that the Judicial Conference of the United States
should, as soon as practicable after the date of enactment of this Act,
propose amended Federal Rules of Bankruptcy Procedure that provide--
(1) notwithstanding the provisions of Rule 3015(f), in cases
under chapter 13 of title 11, United States Code, that an objection
to the confirmation of a plan filed by a governmental unit on or
before the date that is 60 days after the date on which the debtor
files all tax returns required under sections 1308 and 1325(a)(7)
of title 11, United States Code, shall be treated for all purposes
as if such objection had been timely filed before such
confirmation; and
(2) in addition to the provisions of Rule 3007, in a case under
chapter 13 of title 11, United States Code, that no objection to a
claim for a tax with respect to which a return is required to be
filed under section 1308 of title 11, United States Code, shall be
filed until such return has been filed as required.
SEC. 717. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a)(1) of title 11, United States Code, is amended--
(1) by inserting ``including a discussion of the potential
material Federal tax consequences of the plan to the debtor, any
successor to the debtor, and a hypothetical investor typical of the
holders of claims or interests in the case,'' after ``records,'';
and
(2) by striking ``a hypothetical reasonable investor typical of
holders of claims or interests'' and inserting ``such a
hypothetical investor''.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended by
sections 224, 303, 311, and 401, is amended by inserting after
paragraph (25) the following:
``(26) under subsection (a), of the setoff under applicable
nonbankruptcy law of an income tax refund, by a governmental unit,
with respect to a taxable period that ended before the date of the
order for relief against an income tax liability for a taxable
period that also ended before the date of the order for relief,
except that in any case in which the setoff of an income tax refund
is not permitted under applicable nonbankruptcy law because of a
pending action to determine the amount or legality of a tax
liability, the governmental unit may hold the refund pending the
resolution of the action, unless the court, on the motion of the
trustee and after notice and a hearing, grants the taxing authority
adequate protection (within the meaning of section 361) for the
secured claim of such authority in the setoff under section
506(a);''.
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF STATE AND
LOCAL TAXES.
(a) In General.--
(1) Special provisions.--Section 346 of title 11, United States
Code, is amended to read as follows:
``Sec. 346. Special provisions related to the treatment of State and
local taxes
``(a) Whenever the Internal Revenue Code of 1986 provides that a
separate taxable estate or entity is created in a case concerning a
debtor under this title, and the income, gain, loss, deductions, and
credits of such estate shall be taxed to or claimed by the estate, a
separate taxable estate is also created for purposes of any State and
local law imposing a tax on or measured by income and such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the
estate and may not be taxed to or claimed by the debtor. The preceding
sentence shall not apply if the case is dismissed. The trustee shall
make tax returns of income required under any such State or local law.
``(b) Whenever the Internal Revenue Code of 1986 provides that no
separate taxable estate shall be created in a case concerning a debtor
under this title, and the income, gain, loss, deductions, and credits
of an estate shall be taxed to or claimed by the debtor, such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the
debtor under a State or local law imposing a tax on or measured by
income and may not be taxed to or claimed by the estate. The trustee
shall make such tax returns of income of corporations and of
partnerships as are required under any State or local law, but with
respect to partnerships, shall make such returns only to the extent
such returns are also required to be made under such Code. The estate
shall be liable for any tax imposed on such corporation or partnership,
but not for any tax imposed on partners or members.
``(c) With respect to a partnership or any entity treated as a
partnership under a State or local law imposing a tax on or measured by
income that is a debtor in a case under this title, any gain or loss
resulting from a distribution of property from such partnership, or any
distributive share of any income, gain, loss, deduction, or credit of a
partner or member that is distributed, or considered distributed, from
such partnership, after the commencement of the case, is gain, loss,
income, deduction, or credit, as the case may be, of the partner or
member, and if such partner or member is a debtor in a case under this
title, shall be subject to tax in accordance with subsection (a) or
(b).
``(d) For purposes of any State or local law imposing a tax on or
measured by income, the taxable period of a debtor in a case under this
title shall terminate only if and to the extent that the taxable period
of such debtor terminates under the Internal Revenue Code of 1986.
``(e) The estate in any case described in subsection (a) shall use
the same accounting method as the debtor used immediately before the
commencement of the case, if such method of accounting complies with
applicable nonbankruptcy tax law.
``(f) For purposes of any State or local law imposing a tax on or
measured by income, a transfer of property from the debtor to the
estate or from the estate to the debtor shall not be treated as a
disposition for purposes of any provision assigning tax consequences to
a disposition, except to the extent that such transfer is treated as a
disposition under the Internal Revenue Code of 1986.
``(g) Whenever a tax is imposed pursuant to a State or local law
imposing a tax on or measured by income pursuant to subsection (a) or
(b), such tax shall be imposed at rates generally applicable to the
same types of entities under such State or local law.
``(h) The trustee shall withhold from any payment of claims for
wages, salaries, commissions, dividends, interest, or other payments,
or collect, any amount required to be withheld or collected under
applicable State or local tax law, and shall pay such withheld or
collected amount to the appropriate governmental unit at the time and
in the manner required by such tax law, and with the same priority as
the claim from which such amount was withheld or collected was paid.
``(i)(1) To the extent that any State or local law imposing a tax
on or measured by income provides for the carryover of any tax
attribute from one taxable period to a subsequent taxable period, the
estate shall succeed to such tax attribute in any case in which such
estate is subject to tax under subsection (a).
``(2) After such a case is closed or dismissed, the debtor shall
succeed to any tax attribute to which the estate succeeded under
paragraph (1) to the extent consistent with the Internal Revenue Code
of 1986.
``(3) The estate may carry back any loss or tax attribute to a
taxable period of the debtor that ended before the date of the order
for relief under this title to the extent that--
``(A) applicable State or local tax law provides for a
carryback in the case of the debtor; and
``(B) the same or a similar tax attribute may be carried back
by the estate to such a taxable period of the debtor under the
Internal Revenue Code of 1986.
``(j)(1) For purposes of any State or local law imposing a tax on
or measured by income, income is not realized by the estate, the
debtor, or a successor to the debtor by reason of discharge of
indebtedness in a case under this title, except to the extent, if any,
that such income is subject to tax under the Internal Revenue Code of
1986.
``(2) Whenever the Internal Revenue Code of 1986 provides that the
amount excluded from gross income in respect of the discharge of
indebtedness in a case under this title shall be applied to reduce the
tax attributes of the debtor or the estate, a similar reduction shall
be made under any State or local law imposing a tax on or measured by
income to the extent such State or local law recognizes such
attributes. Such State or local law may also provide for the reduction
of other attributes to the extent that the full amount of income from
the discharge of indebtedness has not been applied.
``(k)(1) Except as provided in this section and section 505, the
time and manner of filing tax returns and the items of income, gain,
loss, deduction, and credit of any taxpayer shall be determined under
applicable nonbankruptcy law.
``(2) For Federal tax purposes, the provisions of this section are
subject to the Internal Revenue Code of 1986 and other applicable
Federal nonbankruptcy law.''.
(2) Clerical Amendment.--The table of sections for chapter 3 of
title 11, United States Code, is amended by striking the item
relating to section 346 and inserting the following:
``346. Special provisions related to the treatment of State and local
taxes.''.
(b) Conforming Amendments.--Title 11 of the United States Code is
amended--
(1) by striking section 728;
(2) in the table of sections for chapter 7 by striking the item
relating to section 728;
(3) in section 1146--
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d) as subsections
(a) and (b), respectively; and
(4) in section 1231--
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d) as subsections
(a) and (b), respectively.
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RETURNS.
Section 521 of title 11, United States Code, as amended by sections
106, 225, 305, 315, and 316, is amended by adding at the end the
following:
``(j)(1) Notwithstanding any other provision of this title, if the
debtor fails to file a tax return that becomes due after the
commencement of the case or to properly obtain an extension of the due
date for filing such return, the taxing authority may request that the
court enter an order converting or dismissing the case.
``(2) If the debtor does not file the required return or obtain the
extension referred to in paragraph (1) within 90 days after a request
is filed by the taxing authority under that paragraph, the court shall
convert or dismiss the case, whichever is in the best interests of
creditors and the estate.''.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED STATES CODE.
(a) In General.--Title 11, United States Code, is amended by
inserting after chapter 13 the following:
``CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES
``Sec.
``1501. Purpose and scope of application.
``SUBCHAPTER I--GENERAL PROVISIONS
``1502. Definitions.
``1503. International obligations of the United States.
``1504. Commencement of ancillary case.
``1505. Authorization to act in a foreign country.
``1506. Public policy exception.
``1507. Additional assistance.
``1508. Interpretation.
``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
``1509. Right of direct access.
``1510. Limited jurisdiction.
``1511. Commencement of case under section 301 or 303.
``1512. Participation of a foreign representative in a case under this
title.
``1513. Access of foreign creditors to a case under this title.
``1514. Notification to foreign creditors concerning a case under this
title.
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``1515. Application for recognition.
``1516. Presumptions concerning recognition.
``1517. Order granting recognition.
``1518. Subsequent information.
``1519. Relief that may be granted upon filing petition for recognition.
``1520. Effects of recognition of a foreign main proceeding.
``1521. Relief that may be granted upon recognition.
``1522. Protection of creditors and other interested persons.
``1523. Actions to avoid acts detrimental to creditors.
``1524. Intervention by a foreign representative.
``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
``1525. Cooperation and direct communication between the court and
foreign courts or foreign representatives.
``1526. Cooperation and direct communication between the trustee and
foreign courts or foreign representatives.
``1527. Forms of cooperation.
``SUBCHAPTER V--CONCURRENT PROCEEDINGS
``1528. Commencement of a case under this title after recognition of a
foreign main proceeding.
``1529. Coordination of a case under this title and a foreign
proceeding.
``1530. Coordination of more than 1 foreign proceeding.
``1531. Presumption of insolvency based on recognition of a foreign main
proceeding.
``1532. Rule of payment in concurrent proceedings.
``Sec. 1501. Purpose and scope of application
``(a) The purpose of this chapter is to incorporate the Model Law
on Cross-Border Insolvency so as to provide effective mechanisms for
dealing with cases of cross-border insolvency with the objectives of--
``(1) cooperation between--
``(A) courts of the United States, United States trustees,
trustees, examiners, debtors, and debtors in possession; and
``(B) the courts and other competent authorities of foreign
countries involved in cross-border insolvency cases;
``(2) greater legal certainty for trade and investment;
``(3) fair and efficient administration of cross-border
insolvencies that protects the interests of all creditors, and
other interested entities, including the debtor;
``(4) protection and maximization of the value of the debtor's
assets; and
``(5) facilitation of the rescue of financially troubled
businesses, thereby protecting investment and preserving
employment.
``(b) This chapter applies where--
``(1) assistance is sought in the United States by a foreign
court or a foreign representative in connection with a foreign
proceeding;
``(2) assistance is sought in a foreign country in connection
with a case under this title;
``(3) a foreign proceeding and a case under this title with
respect to the same debtor are pending concurrently; or
``(4) creditors or other interested persons in a foreign
country have an interest in requesting the commencement of, or
participating in, a case or proceeding under this title.
``(c) This chapter does not apply to--
``(1) a proceeding concerning an entity, other than a foreign
insurance company, identified by exclusion in section 109(b);
``(2) an individual, or to an individual and such individual's
spouse, who have debts within the limits specified in section
109(e) and who are citizens of the United States or aliens lawfully
admitted for permanent residence in the United States; or
``(3) an entity subject to a proceeding under the Securities
Investor Protection Act of 1970, a stockbroker subject to
subchapter III of chapter 7 of this title, or a commodity broker
subject to subchapter IV of chapter 7 of this title.
``(d) The court may not grant relief under this chapter with
respect to any deposit, escrow, trust fund, or other security required
or permitted under any applicable State insurance law or regulation for
the benefit of claim holders in the United States.
``SUBCHAPTER I--GENERAL PROVISIONS
``Sec. 1502. Definitions
``For the purposes of this chapter, the term--
``(1) `debtor' means an entity that is the subject of a foreign
proceeding;
``(2) `establishment' means any place of operations where the
debtor carries out a nontransitory economic activity;
``(3) `foreign court' means a judicial or other authority
competent to control or supervise a foreign proceeding;
``(4) `foreign main proceeding' means a foreign proceeding
pending 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, pending in a country where
the debtor has an establishment;
``(6) `trustee' includes a trustee, a debtor in possession in a
case under any chapter of this title, or a debtor under chapter 9
of this title;
``(7) `recognition' means the entry of an order granting
recognition of a foreign main proceeding or foreign nonmain
proceeding under this chapter; and
``(8) `within the territorial jurisdiction of the United
States', when used with reference to property of a debtor, refers
to tangible property located within the territory of the United
States and intangible property deemed under applicable
nonbankruptcy law to be located within that territory, including
any property subject to attachment or garnishment that may properly
be seized or garnished by an action in a Federal or State court in
the United States.
``Sec. 1503. International obligations of the United States
``To the extent that this chapter conflicts with an obligation of
the United States arising out of any treaty or other form of agreement
to which it is a party with one or more other countries, the
requirements of the treaty or agreement prevail.
``Sec. 1504. Commencement of ancillary case
``A case under this chapter is commenced by the filing of a
petition for recognition of a foreign proceeding under section 1515.
``Sec. 1505. Authorization to act in a foreign country
``A trustee or another entity (including an examiner) may be
authorized by the court to act in a foreign country on behalf of an
estate created under section 541. An entity authorized to act under
this section may act in any way permitted by the applicable foreign
law.
``Sec. 1506. Public policy exception
``Nothing in this chapter prevents the court from refusing to take
an action governed by this chapter if the action would be manifestly
contrary to the public policy of the United States.
``Sec. 1507. Additional assistance
``(a) Subject to the specific limitations stated elsewhere in this
chapter the court, if recognition is granted, may provide additional
assistance to a foreign representative under this title or under other
laws of the United States.
``(b) In determining whether to provide additional assistance under
this title or under other laws of the United States, the court shall
consider whether such additional assistance, consistent with the
principles of comity, will reasonably assure--
``(1) just treatment of all holders of claims against or
interests in the debtor's property;
``(2) protection of claim holders in the United States against
prejudice and inconvenience in the processing of claims in such
foreign proceeding;
``(3) prevention of preferential or fraudulent dispositions of
property of the debtor;
``(4) distribution of proceeds of the debtor's property
substantially in accordance with the order prescribed by this
title; and
``(5) if appropriate, the provision of an opportunity for a
fresh start for the individual that such foreign proceeding
concerns.
``Sec. 1508. Interpretation
``In interpreting this chapter, the court shall consider its
international origin, and the need to promote an application of this
chapter that is consistent with the application of similar statutes
adopted by foreign jurisdictions.
``SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
``Sec. 1509. Right of direct access
``(a) A foreign representative may commence a case under section
1504 by filing directly with the court a petition for recognition of a
foreign proceeding under section 1515.
``(b) If the court grants recognition under section 1517, and
subject to any limitations that the court may impose consistent with
the policy of this chapter--
``(1) the foreign representative has the capacity to sue and be
sued in a court in the United States;
``(2) the foreign representative may apply directly to a court
in the United States for appropriate relief in that court; and
``(3) a court in the United States shall grant comity or
cooperation to the foreign representative.
``(c) A request for comity or cooperation by a foreign
representative in a court in the United States other than the court
which granted recognition shall be accompanied by a certified copy of
an order granting recognition under section 1517.
``(d) If the court denies recognition under this chapter, the court
may issue any appropriate order necessary to prevent the foreign
representative from obtaining comity or cooperation from courts in the
United States.
``(e) Whether or not the court grants recognition, and subject to
sections 306 and 1510, a foreign representative is subject to
applicable nonbankruptcy law.
``(f) Notwithstanding any other provision of this section, the
failure of a foreign representative to commence a case or to obtain
recognition under this chapter does not affect any right the foreign
representative may have to sue in a court in the United States to
collect or recover a claim which is the property of the debtor.
``Sec. 1510. Limited jurisdiction
``The sole fact that a foreign representative files a petition
under section 1515 does not subject the foreign representative to the
jurisdiction of any court in the United States for any other purpose.
``Sec. 1511. Commencement of case under section 301 or 303
``(a) Upon recognition, a foreign representative may commence--
``(1) an involuntary case under section 303; or
``(2) a voluntary case under section 301 or 302, if the foreign
proceeding is a foreign main proceeding.
``(b) The petition commencing a case under subsection (a) must be
accompanied by a certified copy of an order granting recognition. The
court where the petition for recognition has been filed must be advised
of the foreign representative's intent to commence a case under
subsection (a) prior to such commencement.
``Sec. 1512. Participation of a foreign representative in a case under
this title
``Upon recognition of a foreign proceeding, the foreign
representative in the recognized proceeding is entitled to participate
as a party in interest in a case regarding the debtor under this title.
``Sec. 1513. Access of foreign creditors to a case under this title
``(a) Foreign creditors have the same rights regarding the
commencement of, and participation in, a case under this title as
domestic creditors.
``(b)(1) Subsection (a) does not change or codify present law as to
the priority of claims under section 507 or 726, except that the claim
of a foreign creditor under those sections shall not be given a lower
priority than that of general unsecured claims without priority solely
because the holder of such claim is a foreign creditor.
``(2)(A) Subsection (a) and paragraph (1) do not change or codify
present law as to the allowability of foreign revenue claims or other
foreign public law claims in a proceeding under this title.
``(B) Allowance and priority as to a foreign tax claim or other
foreign public law claim shall be governed by any applicable tax treaty
of the United States, under the conditions and circumstances specified
therein.
``Sec. 1514. Notification to foreign creditors concerning a case under
this title
``(a) Whenever in a case under this title notice is to be given to
creditors generally or to any class or category of creditors, such
notice shall also be given to the known creditors generally, or to
creditors in the notified class or category, that do not have addresses
in the United States. The court may order that appropriate steps be
taken with a view to notifying any creditor whose address is not yet
known.
``(b) Such notification to creditors with foreign addresses
described in subsection (a) shall be given individually, unless the
court considers that, under the circumstances, some other form of
notification would be more appropriate. No letter or other formality is
required.
``(c) When a notification of commencement of a case is to be given
to foreign creditors, such notification shall--
``(1) indicate the time period for filing proofs of claim and
specify the place for filing such proofs of claim;
``(2) indicate whether secured creditors need to file proofs of
claim; and
``(3) contain any other information required to be included in
such notification to creditors under this title and the orders of
the court.
``(d) Any rule of procedure or order of the court as to notice or
the filing of a proof of claim shall provide such additional time to
creditors with foreign addresses as is reasonable under the
circumstances.
``SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
``Sec. 1515. Application for recognition
``(a) A foreign representative applies to the court for recognition
of a 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 such foreign
proceeding and appointing the foreign representative;
``(2) a certificate from the foreign court affirming the
existence of such 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 such foreign proceeding and of the appointment of the
foreign representative.
``(c) A petition for recognition shall also be accompanied by a
statement identifying all foreign proceedings with respect to the
debtor that are known to the foreign representative.
``(d) The documents referred to in paragraphs (1) and (2) of
subsection (b) shall be translated into English. The court may require
a translation into English of additional documents.
``Sec. 1516. Presumptions concerning recognition
``(a) If the decision or certificate referred to in section 1515(b)
indicates that the foreign proceeding is a foreign proceeding and that
the person or body is a foreign representative, the court is entitled
to so presume.
``(b) The court is entitled to presume that documents submitted in
support of the petition for recognition are authentic, whether or not
they have been legalized.
``(c) In the absence of evidence to the contrary, the debtor's
registered office, or habitual residence in the case of an individual,
is presumed to be the center of the debtor's main interests.
``Sec. 1517. Order granting recognition
``(a) Subject to section 1506, after notice and a hearing, an order
recognizing a foreign proceeding shall be entered if--
``(1) such foreign proceeding for which recognition is sought
is a foreign main proceeding or foreign nonmain proceeding within
the meaning of section 1502;
``(2) the foreign representative applying for recognition is a
person or body; and
``(3) the petition meets the requirements of section 1515.
``(b) Such foreign proceeding shall be recognized--
``(1) as a foreign main proceeding if it is pending in the
country where the debtor has the center of its main interests; or
``(2) as a foreign nonmain proceeding if the debtor has an
establishment within the meaning of section 1502 in the foreign
country where the proceeding is pending.
``(c) A petition for recognition of a foreign proceeding shall be
decided upon at the earliest possible time. Entry of an order
recognizing a foreign proceeding constitutes recognition under this
chapter.
``(d) The provisions of this subchapter do not prevent modification
or termination of recognition if it is shown that the grounds for
granting it were fully or partially lacking or have ceased to exist,
but in considering such action the court shall give due weight to
possible prejudice to parties that have relied upon the order granting
recognition. A case under this chapter may be closed in the manner
prescribed under section 350.
``Sec. 1518. Subsequent information
``From the time of filing the petition for recognition of a 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 such foreign
proceeding or the status of the foreign representative's
appointment; and
``(2) any other foreign proceeding regarding the debtor that
becomes known to the foreign representative.
``Sec. 1519. Relief that may be granted upon filing petition for
recognition
``(a) From the time of filing a petition for recognition until the
court rules on the petition, the court may, at the request of the
foreign representative, where relief is urgently needed to protect the
assets of the debtor or the interests of the creditors, grant relief of
a provisional nature, including--
``(1) staying execution against the debtor's assets;
``(2) entrusting the administration or realization of all or
part of the debtor's assets located in the United States to the
foreign representative or another person authorized by the court,
including an examiner, in order to protect and preserve the value
of assets that, by their nature or because of other circumstances,
are perishable, susceptible to devaluation or otherwise in
jeopardy; and
``(3) any relief referred to in paragraph (3), (4), or (7) of
section 1521(a).
``(b) Unless extended under section 1521(a)(6), the relief granted
under this section terminates when the petition for recognition is
granted.
``(c) It is a ground for denial of relief under this section that
such relief would interfere with the administration of a foreign main
proceeding.
``(d) The court may not enjoin a police or regulatory act of a
governmental unit, including a criminal action or proceeding, under
this section.
``(e) The standards, procedures, and limitations applicable to an
injunction shall apply to relief under this section.
``(f) The exercise of rights not subject to the stay arising under
section 362(a) pursuant to paragraph (6), (7), (17), or (27) of section
362(b) or pursuant to section 362(n) shall not be stayed by any order
of a court or administrative agency in any proceeding under this
chapter.
``Sec. 1520. Effects of recognition of a foreign main proceeding
``(a) Upon recognition of a foreign proceeding that is a foreign
main proceeding--
``(1) sections 361 and 362 apply with respect to the debtor and
the property of the debtor that is within the territorial
jurisdiction of the United States;
``(2) sections 363, 549, and 552 apply to a transfer of an
interest of the debtor in property that is within the territorial
jurisdiction of the United States to the same extent that the
sections would apply to property of an estate;
``(3) unless the court orders otherwise, the foreign
representative may operate the debtor's business and may exercise
the rights and powers of a trustee under and to the extent provided
by sections 363 and 552; and
``(4) section 552 applies to property of the debtor that is
within the territorial jurisdiction of the United States.
``(b) Subsection (a) does not affect the right to commence an
individual action or proceeding in a foreign country to the extent
necessary to preserve a claim against the debtor.
``(c) Subsection (a) does not affect the right of a foreign
representative or an entity to file a petition commencing a case under
this title or the right of any party to file claims or take other
proper actions in such a case.
``Sec. 1521. Relief that may be granted upon recognition
``(a) Upon recognition of a foreign proceeding, whether main or
nonmain, where necessary to effectuate the purpose of this chapter and
to protect the assets of the debtor or the interests of the creditors,
the court may, at the request of the foreign representative, grant any
appropriate relief, including--
``(1) staying the commencement or continuation of an individual
action or proceeding concerning the debtor's assets, rights,
obligations or liabilities to the extent they have not been stayed
under section 1520(a);
``(2) staying execution against the debtor's assets to the
extent it has not been stayed under section 1520(a);
``(3) suspending the right to transfer, encumber or otherwise
dispose of any assets of the debtor to the extent this right has
not been suspended under section 1520(a);
``(4) providing for the examination of witnesses, the taking of
evidence or the delivery of information concerning the debtor's
assets, affairs, rights, obligations or liabilities;
``(5) entrusting the administration or realization of all or
part of the debtor's assets within the territorial jurisdiction of
the United States to the foreign representative or another person,
including an examiner, authorized by the court;
``(6) extending relief granted under section 1519(a); and
``(7) granting any additional relief that may be available to a
trustee, except for relief available under sections 522, 544, 545,
547, 548, 550, and 724(a).
``(b) Upon recognition of a foreign proceeding, whether main or
nonmain, the court may, at the request of the foreign representative,
entrust the distribution of all or part of the debtor's assets located
in the United States to the foreign representative or another person,
including an examiner, authorized by the court, provided that the court
is satisfied that the interests of creditors in the United States are
sufficiently protected.
``(c) In granting relief under this section to a representative of
a foreign nonmain proceeding, the court must be satisfied that the
relief relates to assets that, under the law of the United States,
should be administered in the foreign nonmain proceeding or concerns
information required in that proceeding.
``(d) The court may not enjoin a police or regulatory act of a
governmental unit, including a criminal action or proceeding, under
this section.
``(e) The standards, procedures, and limitations applicable to an
injunction shall apply to relief under paragraphs (1), (2), (3), and
(6) of subsection (a).
``(f) The exercise of rights not subject to the stay arising under
section 362(a) pursuant to paragraph (6), (7), (17), or (27) of section
362(b) or pursuant to section 362(n) shall not be stayed by any order
of a court or administrative agency in any proceeding under this
chapter.
``Sec. 1522. Protection of creditors and other interested persons
``(a) The court may grant relief under section 1519 or 1521, or may
modify or terminate relief under subsection (c), only if the interests
of the creditors and other interested entities, including the debtor,
are sufficiently protected.
``(b) The court may subject relief granted under section 1519 or
1521, or the operation of the debtor's business under section
1520(a)(3), to conditions it considers appropriate, including the
giving of security or the filing of a bond.
``(c) The court may, at the request of the foreign representative
or an entity affected by relief granted under section 1519 or 1521, or
at its own motion, modify or terminate such relief.
``(d) Section 1104(d) shall apply to the appointment of an examiner
under this chapter. Any examiner shall comply with the qualification
requirements imposed on a trustee by section 322.
``Sec. 1523. Actions to avoid acts detrimental to creditors
``(a) Upon recognition of a foreign proceeding, the foreign
representative has standing in a case concerning the debtor pending
under another chapter of this title to initiate actions under sections
522, 544, 545, 547, 548, 550, 553, and 724(a).
``(b) When a foreign proceeding is a foreign nonmain proceeding,
the court must be satisfied that an action under subsection (a) relates
to assets that, under United States law, should be administered in the
foreign nonmain proceeding.
``Sec. 1524. Intervention by a foreign representative
``Upon recognition of a foreign proceeding, the foreign
representative may intervene in any proceedings in a State or Federal
court in the United States in which the debtor is a party.
``SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
``Sec. 1525. Cooperation and direct communication between the court and
foreign courts or foreign representatives
``(a) Consistent with section 1501, the court shall cooperate to
the maximum extent possible with a foreign court or a foreign
representative, either directly or through the trustee.
``(b) The court is entitled to communicate directly with, or to
request information or assistance directly from, a foreign court or a
foreign representative, subject to the rights of a party in interest to
notice and participation.
``Sec. 1526. Cooperation and direct communication between the trustee
and foreign courts or foreign representatives
``(a) Consistent with section 1501, the trustee or other person,
including an examiner, authorized by the court, shall, subject to the
supervision of the court, cooperate to the maximum extent possible with
a foreign court or a foreign representative.
``(b) The trustee or other person, including an examiner,
authorized by the court is entitled, subject to the supervision of the
court, to communicate directly with a foreign court or a foreign
representative.
``Sec. 1527. Forms of cooperation
``Cooperation referred to in sections 1525 and 1526 may be
implemented by any appropriate means, including--
``(1) appointment of a person or body, including an examiner,
to act at the direction of the court;
``(2) communication of information by any means considered
appropriate by the court;
``(3) coordination of the administration and supervision of the
debtor's assets and affairs;
``(4) approval or implementation of agreements concerning the
coordination of proceedings; and
``(5) coordination of concurrent proceedings regarding the same
debtor.
``SUBCHAPTER V--CONCURRENT PROCEEDINGS
``Sec. 1528. Commencement of a case under this title after recognition
of a foreign main proceeding
``After recognition of a foreign main proceeding, a case under
another chapter of this title may be commenced only if the debtor has
assets in the United States. The effects of such case shall be
restricted to the assets of the debtor that are within the territorial
jurisdiction of the United States and, to the extent necessary to
implement cooperation and coordination under sections 1525, 1526, and
1527, to other assets of the debtor that are within the jurisdiction of
the court under sections 541(a) of this title, and 1334(e) of title 28,
to the extent that such other assets are not subject to the
jurisdiction and control of a foreign proceeding that has been
recognized under this chapter.
``Sec. 1529. Coordination of a case under this title and a foreign
proceeding
``If a foreign proceeding and a case under another chapter of this
title are pending concurrently regarding the same debtor, the court
shall seek cooperation and coordination under sections 1525, 1526, and
1527, and the following shall apply:
``(1) If the case in the United States pending at the time the
petition for recognition of such foreign proceeding is filed--
``(A) any relief granted under section 1519 or 1521 must be
consistent with the relief granted in the case in the United
States; and
``(B) section 1520 does not apply even if such foreign
proceeding is recognized as a foreign main proceeding.
``(2) If a case in the United States under this title commences
after recognition, or after the date of the filing of the petition
for recognition, of such foreign proceeding--
``(A) any relief in effect under section 1519 or 1521 shall
be reviewed by the court and shall be modified or terminated if
inconsistent with the case in the United States; and
``(B) if such foreign proceeding is a foreign main
proceeding, the stay and suspension referred to in section
1520(a) shall be modified or terminated if inconsistent with
the relief granted in the case in the United States.
``(3) In granting, extending, or modifying relief granted to a
representative of a foreign nonmain proceeding, the court must be
satisfied that the relief relates to assets that, under the laws of
the United States, should be administered in the foreign nonmain
proceeding or concerns information required in that proceeding.
``(4) In achieving cooperation and coordination under sections
1528 and 1529, the court may grant any of the relief authorized
under section 305.
``Sec. 1530. Coordination of more than 1 foreign proceeding
``In matters referred to in section 1501, with respect to more than
1 foreign proceeding regarding the debtor, the court shall seek
cooperation and coordination under sections 1525, 1526, and 1527, and
the following shall apply:
``(1) Any relief granted under section 1519 or 1521 to a
representative of a foreign nonmain proceeding after recognition of
a foreign main proceeding must be consistent with the foreign main
proceeding.
``(2) If a foreign main proceeding is recognized after
recognition, or after the filing of a petition for recognition, of
a foreign nonmain proceeding, any relief in effect under section
1519 or 1521 shall be reviewed by the court and shall be modified
or terminated if inconsistent with the foreign main proceeding.
``(3) If, after recognition of a foreign nonmain proceeding,
another foreign nonmain proceeding is recognized, the court shall
grant, modify, or terminate relief for the purpose of facilitating
coordination of the proceedings.
``Sec. 1531. Presumption of insolvency based on recognition of a
foreign main proceeding
``In the absence of evidence to the contrary, recognition of a
foreign main proceeding is, for the purpose of commencing a proceeding
under section 303, proof that the debtor is generally not paying its
debts as such debts become due.
``Sec. 1532. Rule of payment in concurrent proceedings
``Without prejudice to secured claims or rights in rem, a creditor
who has received payment with respect to its claim in a foreign
proceeding pursuant to a law relating to insolvency may not receive a
payment for the same claim in a case under any other chapter of this
title regarding the debtor, so long as the payment to other creditors
of the same class is proportionately less than the payment the creditor
has already received.''.
(b) Clerical Amendment.--The table of chapters for title 11, United
States Code, is amended by inserting after the item relating to chapter
13 the following:
``15. Ancillary and Other Cross-Border Cases.....................1501''.
SEC. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, UNITED STATES CODE.
(a) Applicability of Chapters.--Section 103 of title 11, United
States Code, is amended--
(1) in subsection (a), by inserting before the period the
following: ``, and this chapter, sections 307, 362(n), 555 through
557, and 559 through 562 apply in a case under chapter 15''; and
(2) by adding at the end the following:
``(k) Chapter 15 applies only in a case under such chapter, except
that--
``(1) sections 1505, 1513, and 1514 apply in all cases under
this title; and
``(2) section 1509 applies whether or not a case under this
title is pending.''.
(b) Definitions.--Section 101 of title 11, United States Code, is
amended by striking paragraphs (23) and (24) and inserting the
following:
``(23) `foreign proceeding' means a collective judicial or
administrative proceeding in a foreign country, including an
interim proceeding, under a law relating to insolvency or
adjustment of debt in which proceeding the assets and affairs of
the debtor are subject to control or supervision by a foreign
court, for the purpose of reorganization or liquidation;
``(24) `foreign representative' means a person or body,
including a person or body appointed on an interim basis,
authorized in a foreign proceeding to administer the reorganization
or the liquidation of the debtor's assets or affairs or to act as a
representative of such foreign proceeding;''.
(c) Amendments to Title 28, United States Code.--
(1) Procedures.--Section 157(b)(2) of title 28, United States
Code, is amended--
(A) in subparagraph (N), by striking ``and'' at the end;
(B) in subparagraph (O), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following:
``(P) recognition of foreign proceedings and other matters
under chapter 15 of title 11.''.
(2) Bankruptcy cases and proceedings.--Section 1334(c) of title
28, United States Code, is amended by striking ``Nothing in'' and
inserting ``Except with respect to a case under chapter 15 of title
11, nothing in''.
(3) Duties of trustees.--Section 586(a)(3) of title 28, United
States Code, is amended by striking ``or 13'' and inserting ``13,
or 15''.
(4) Venue of cases ancillary to foreign proceedings.--Section
1410 of title 28, United States Code, is amended to read as
follows:
``Sec. 1410. Venue of cases ancillary to foreign proceedings
``A case under chapter 15 of title 11 may be commenced in the
district court of the United States for the district--
``(1) in which the debtor has its principal place of business
or principal assets in the United States;
``(2) if the debtor does not have a place of business or assets
in the United States, in which there is pending against the debtor
an action or proceeding in a Federal or State court; or
``(3) in a case other than those specified in paragraph (1) or
(2), in which venue will be consistent with the interests of
justice and the convenience of the parties, having regard to the
relief sought by the foreign representative.''.
(d) Other Sections of Title 11.--Title 11 of the United States Code
is amended--
(1) in section 109(b), by striking paragraph (3) and inserting
the following:
``(3)(A) a foreign insurance company, engaged in such business
in the United States; or
``(B) a foreign bank, savings bank, cooperative bank, savings
and loan association, building and loan association, or credit
union, that has a branch or agency (as defined in section 1(b) of
the International Banking Act of 1978 in the United States.'';
(2) in section 303, by striking subsection (k);
(3) by striking section 304;
(4) in the table of sections for chapter 3 by striking the item
relating to section 304;
(5) in section 306 by striking ``, 304,'' each place it
appears;
(6) in section 305(a) by striking paragraph (2) and inserting
the following:
``(2)(A) a petition under section 1515 for recognition of a
foreign proceeding has been granted; and
``(B) the purposes of chapter 15 of this title would be best
served by such dismissal or suspension.''; and
(7) in section 508--
(A) by striking subsection (a); and
(B) in subsection (b), by striking ``(b)''.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS
OF INSURED DEPOSITORY INSTITUTIONS.
(a) Definition of Qualified Financial Contract.--
(1) FDIC-insured depository institutions.--Section 11(e)(8)(D)
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)) is
amended--
(A) by striking ``subsection--'' and inserting
``subsection, the following definitions shall apply:''; and
(B) in clause (i), by inserting ``, resolution, or order''
after ``any similar agreement that the Corporation determines
by regulation''.
(2) Insured credit unions.--Section 207(c)(8)(D) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended--
(A) by striking ``subsection--'' and inserting
``subsection, the following definitions shall apply:''; and
(B) in clause (i), by inserting ``, resolution, or order''
after ``any similar agreement that the Board determines by
regulation''.
(b) Definition of Securities Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(ii)) is amended to read as follows:
``(ii) Securities contract.--The term `securities
contract'--
``(I) means a contract for the purchase, sale, or
loan of a security, a certificate of deposit, a
mortgage loan, or any interest in a mortgage loan, a
group or index of securities, certificates of deposit,
or mortgage loans or interests therein (including any
interest therein or based on the value thereof) or any
option on any of the foregoing, including any option to
purchase or sell any such security, certificate of
deposit, mortgage loan, interest, group or index, or
option, and including any repurchase or reverse
repurchase transaction on any such security,
certificate of deposit, mortgage loan, interest, group
or index, or option;
``(II) does not include any purchase, sale, or
repurchase obligation under a participation in a
commercial mortgage loan unless the Corporation
determines by regulation, resolution, or order to
include any such agreement within the meaning of such
term;
``(III) means any option entered into on a national
securities exchange relating to foreign currencies;
``(IV) means the guarantee by or to any securities
clearing agency of any settlement of cash, securities,
certificates of deposit, mortgage loans or interests
therein, group or index of securities, certificates of
deposit, or mortgage loans or interests therein
(including any interest therein or based on the value
thereof) or option on any of the foregoing, including
any option to purchase or sell any such security,
certificate of deposit, mortgage loan, interest, group
or index, or option;
``(V) means any margin loan;
``(VI) means any other agreement or transaction
that is similar to any agreement or transaction
referred to in this clause;
``(VII) means any combination of the agreements or
transactions referred to in this clause;
``(VIII) means any option to enter into any
agreement or transaction referred to in this clause;
``(IX) means a master agreement that provides for
an agreement or transaction referred to in subclause
(I), (III), (IV), (V), (VI), (VII), or (VIII), together
with all supplements to any such master agreement,
without regard to whether the master agreement provides
for an agreement or transaction that is not a
securities contract under this clause, except that the
master agreement shall be considered to be a securities
contract under this clause only with respect to each
agreement or transaction under the master agreement
that is referred to in subclause (I), (III), (IV), (V),
(VI), (VII), or (VIII); and
``(X) means any security agreement or arrangement
or other credit enhancement related to any agreement or
transaction referred to in this clause, including any
guarantee or reimbursement obligation in connection
with any agreement or transaction referred to in this
clause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(ii) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(ii)) is amended
to read as follows:
``(ii) Securities contract.--The term `securities
contract'--
``(I) means a contract for the purchase, sale, or
loan of a security, a certificate of deposit, a
mortgage loan, or any interest in a mortgage loan, a
group or index of securities, certificates of deposit,
or mortgage loans or interests therein (including any
interest therein or based on the value thereof) or any
option on any of the foregoing, including any option to
purchase or sell any such security, certificate of
deposit, mortgage loan, interest, group or index, or
option, and including any repurchase or reverse
repurchase transaction on any such security,
certificate of deposit, mortgage loan, interest, group
or index, or option;
``(II) does not include any purchase, sale, or
repurchase obligation under a participation in a
commercial mortgage loan unless the Board determines by
regulation, resolution, or order to include any such
agreement within the meaning of such term;
``(III) means any option entered into on a national
securities exchange relating to foreign currencies;
``(IV) means the guarantee by or to any securities
clearing agency of any settlement of cash, securities,
certificates of deposit, mortgage loans or interests
therein, group or index of securities, certificates of
deposit, or mortgage loans or interests therein
(including any interest therein or based on the value
thereof) or option on any of the foregoing, including
any option to purchase or sell any such security,
certificate of deposit, mortgage loan, interest, group
or index, or option;
``(V) means any margin loan;
``(VI) means any other agreement or transaction
that is similar to any agreement or transaction
referred to in this clause;
``(VII) means any combination of the agreements or
transactions referred to in this clause;
``(VIII) means any option to enter into any
agreement or transaction referred to in this clause;
``(IX) means a master agreement that provides for
an agreement or transaction referred to in subclause
(I), (III), (IV), (V), (VI), (VII), or (VIII), together
with all supplements to any such master agreement,
without regard to whether the master agreement provides
for an agreement or transaction that is not a
securities contract under this clause, except that the
master agreement shall be considered to be a securities
contract under this clause only with respect to each
agreement or transaction under the master agreement
that is referred to in subclause (I), (III), (IV), (V),
(VI), (VII), or (VIII); and
``(X) means any security agreement or arrangement
or other credit enhancement related to any agreement or
transaction referred to in this clause, including any
guarantee or reimbursement obligation in connection
with any agreement or transaction referred to in this
clause.''.
(c) Definition of Commodity Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(iii) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(iii)) is amended to read as follows:
``(iii) Commodity contract.--The term `commodity
contract' means--
``(I) with respect to a futures commission
merchant, a contract for the purchase or sale of a
commodity for future delivery on, or subject to the
rules of, a contract market or board of trade;
``(II) with respect to a foreign futures commission
merchant, a foreign future;
``(III) with respect to a leverage transaction
merchant, a leverage transaction;
``(IV) with respect to a clearing organization, a
contract for the purchase or sale of a commodity for
future delivery on, or subject to the rules of, a
contract market or board of trade that is cleared by
such clearing organization, or commodity option traded
on, or subject to the rules of, a contract market or
board of trade that is cleared by such clearing
organization;
``(V) with respect to a commodity options dealer, a
commodity option;
``(VI) any other agreement or transaction that is
similar to any agreement or transaction referred to in
this clause;
``(VII) any combination of the agreements or
transactions referred to in this clause;
``(VIII) any option to enter into any agreement or
transaction referred to in this clause;
``(IX) a master agreement that provides for an
agreement or transaction referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or (VIII),
together with all supplements to any such master
agreement, without regard to whether the master
agreement provides for an agreement or transaction that
is not a commodity contract under this clause, except
that the master agreement shall be considered to be a
commodity contract under this clause only with respect
to each agreement or transaction under the master
agreement that is referred to in subclause (I), (II),
(III), (IV), (V), (VI), (VII), or (VIII); or
``(X) any security agreement or arrangement or
other credit enhancement related to any agreement or
transaction referred to in this clause, including any
guarantee or reimbursement obligation in connection
with any agreement or transaction referred to in this
clause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(iii) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(iii)) is amended
to read as follows:
``(iii) Commodity contract.--The term `commodity
contract' means--
``(I) with respect to a futures commission
merchant, a contract for the purchase or sale of a
commodity for future delivery on, or subject to the
rules of, a contract market or board of trade;
``(II) with respect to a foreign futures commission
merchant, a foreign future;
``(III) with respect to a leverage transaction
merchant, a leverage transaction;
``(IV) with respect to a clearing organization, a
contract for the purchase or sale of a commodity for
future delivery on, or subject to the rules of, a
contract market or board of trade that is cleared by
such clearing organization, or commodity option traded
on, or subject to the rules of, a contract market or
board of trade that is cleared by such clearing
organization;
``(V) with respect to a commodity options dealer, a
commodity option;
``(VI) any other agreement or transaction that is
similar to any agreement or transaction referred to in
this clause;
``(VII) any combination of the agreements or
transactions referred to in this clause;
``(VIII) any option to enter into any agreement or
transaction referred to in this clause;
``(IX) a master agreement that provides for an
agreement or transaction referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or (VIII),
together with all supplements to any such master
agreement, without regard to whether the master
agreement provides for an agreement or transaction that
is not a commodity contract under this clause, except
that the master agreement shall be considered to be a
commodity contract under this clause only with respect
to each agreement or transaction under the master
agreement that is referred to in subclause (I), (II),
(III), (IV), (V), (VI), (VII), or (VIII); or
``(X) any security agreement or arrangement or
other credit enhancement related to any agreement or
transaction referred to in this clause, including any
guarantee or reimbursement obligation in connection
with any agreement or transaction referred to in this
clause.''.
(d) Definition of Forward Contract.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(iv)) is amended to read as follows:
``(iv) Forward contract.--The term `forward contract'
means--
``(I) a contract (other than a commodity contract)
for the purchase, sale, or transfer of a commodity or
any similar good, article, service, right, or interest
which is presently or in the future becomes the subject
of dealing in the forward contract trade, or product or
byproduct thereof, with a maturity date more than 2
days after the date the contract is entered into,
including, a repurchase transaction, reverse repurchase
transaction, consignment, lease, swap, hedge
transaction, deposit, loan, option, allocated
transaction, unallocated transaction, or any other
similar agreement;
``(II) any combination of agreements or
transactions referred to in subclauses (I) and (III);
``(III) any option to enter into any agreement or
transaction referred to in subclause (I) or (II);
``(IV) a master agreement that provides for an
agreement or transaction referred to in subclauses (I),
(II), or (III), together with all supplements to any
such master agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a forward contract under this
clause, except that the master agreement shall be
considered to be a forward contract under this clause
only with respect to each agreement or transaction
under the master agreement that is referred to in
subclause (I), (II), or (III); or
``(V) any security agreement or arrangement or
other credit enhancement related to any agreement or
transaction referred to in subclause (I), (II), (III),
or (IV), including any guarantee or reimbursement
obligation in connection with any agreement or
transaction referred to in any such subclause.''.
(2) Insured credit unions.--Section 207(c)(8)(D)(iv) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(iv)) is amended
to read as follows:
``(iv) Forward contract.--The term `forward contract'
means--
``(I) a contract (other than a commodity contract)
for the purchase, sale, or transfer of a commodity or
any similar good, article, service, right, or interest
which is presently or in the future becomes the subject
of dealing in the forward contract trade, or product or
byproduct thereof, with a maturity date more than 2
days after the date the contract is entered into,
including, a repurchase transaction, reverse repurchase
transaction, consignment, lease, swap, hedge
transaction, deposit, loan, option, allocated
transaction, unallocated transaction, or any other
similar agreement;
``(II) any combination of agreements or
transactions referred to in subclauses (I) and (III);
``(III) any option to enter into any agreement or
transaction referred to in subclause (I) or (II);
``(IV) a master agreement that provides for an
agreement or transaction referred to in subclauses (I),
(II), or (III), together with all supplements to any
such master agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a forward contract under this
clause, except that the master agreement shall be
considered to be a forward contract under this clause
only with respect to each agreement or transaction
under the master agreement that is referred to in
subclause (I), (II), or (III); or
``(V) any security agreement or arrangement or
other credit enhancement related to any agreement or
transaction referred to in subclause (I), (II), (III),
or (IV), including any guarantee or reimbursement
obligation in connection with any agreement or
transaction referred to in any such subclause.''.
(e) Definition of Repurchase Agreement.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(v)) is amended to read as follows:
``(v) Repurchase agreement.--The term `repurchase
agreement' (which definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement, including related terms,
which provides for the transfer of one or more
certificates of deposit, mortgage-related securities
(as such term is defined in the Securities Exchange Act
of 1934), mortgage loans, interests in mortgage-related
securities or mortgage loans, eligible bankers'
acceptances, qualified foreign government securities or
securities that are direct obligations of, or that are
fully guaranteed by, the United States or any agency of
the United States against the transfer of funds by the
transferee of such certificates of deposit, eligible
bankers' acceptances, securities, mortgage loans, or
interests with a simultaneous agreement by such
transferee to transfer to the transferor thereof
certificates of deposit, eligible bankers' acceptances,
securities, mortgage loans, or interests as described
above, at a date certain not later than 1 year after
such transfers or on demand, against the transfer of
funds, or any other similar agreement;
``(II) does not include any repurchase obligation
under a participation in a commercial mortgage loan
unless the Corporation determines by regulation,
resolution, or order to include any such participation
within the meaning of such term;
``(III) means any combination of agreements or
transactions referred to in subclauses (I) and (IV);
``(IV) means any option to enter into any agreement
or transaction referred to in subclause (I) or (III);
``(V) means a master agreement that provides for an
agreement or transaction referred to in subclause (I),
(III), or (IV), together with all supplements to any
such master agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a repurchase agreement under
this clause, except that the master agreement shall be
considered to be a repurchase agreement under this
subclause only with respect to each agreement or
transaction under the master agreement that is referred
to in subclause (I), (III), or (IV); and
``(VI) means any security agreement or arrangement
or other credit enhancement related to any agreement or
transaction referred to in subclause (I), (III), (IV),
or (V), including any guarantee or reimbursement
obligation in connection with any agreement or
transaction referred to in any such subclause.
For purposes of this clause, the term `qualified foreign
government security' means a security that is a direct
obligation of, or that is fully guaranteed by, the central
government of a member of the Organization for Economic
Cooperation and Development (as determined by regulation or
order adopted by the appropriate Federal banking
authority).''.
(2) Insured credit unions.--Section 207(c)(8)(D)(v) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(v)) is amended to
read as follows:
``(v) Repurchase agreement.--The term `repurchase
agreement' (which definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement, including related terms,
which provides for the transfer of one or more
certificates of deposit, mortgage-related securities
(as such term is defined in the Securities Exchange Act
of 1934), mortgage loans, interests in mortgage-related
securities or mortgage loans, eligible bankers'
acceptances, qualified foreign government securities or
securities that are direct obligations of, or that are
fully guaranteed by, the United States or any agency of
the United States against the transfer of funds by the
transferee of such certificates of deposit, eligible
bankers' acceptances, securities, mortgage loans, or
interests with a simultaneous agreement by such
transferee to transfer to the transferor thereof
certificates of deposit, eligible bankers' acceptances,
securities, mortgage loans, or interests as described
above, at a date certain not later than 1 year after
such transfers or on demand, against the transfer of
funds, or any other similar agreement;
``(II) does not include any repurchase obligation
under a participation in a commercial mortgage loan
unless the Board determines by regulation, resolution,
or order to include any such participation within the
meaning of such term;
``(III) means any combination of agreements or
transactions referred to in subclauses (I) and (IV);
``(IV) means any option to enter into any agreement
or transaction referred to in subclause (I) or (III);
``(V) means a master agreement that provides for an
agreement or transaction referred to in subclause (I),
(III), or (IV), together with all supplements to any
such master agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a repurchase agreement under
this clause, except that the master agreement shall be
considered to be a repurchase agreement under this
subclause only with respect to each agreement or
transaction under the master agreement that is referred
to in subclause (I), (III), or (IV); and
``(VI) means any security agreement or arrangement
or other credit enhancement related to any agreement or
transaction referred to in subclause (I), (III), (IV),
or (V), including any guarantee or reimbursement
obligation in connection with any agreement or
transaction referred to in any such subclause.
For purposes of this clause, the term `qualified foreign
government security' means a security that is a direct
obligation of, or that is fully guaranteed by, the central
government of a member of the Organization for Economic
Cooperation and Development (as determined by regulation or
order adopted by the appropriate Federal banking
authority).''.
(f) Definition of Swap Agreement.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(vi) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(vi)) is amended to read as follows:
``(vi) Swap agreement.--The term `swap agreement'
means--
``(I) any agreement, including the terms and
conditions incorporated by reference in any such
agreement, which is an interest rate swap, option,
future, or forward agreement, including a rate floor,
rate cap, rate collar, cross-currency rate swap, and
basis swap; a spot, same day-tomorrow, tomorrow-next,
forward, or other foreign exchange or precious metals
agreement; a currency swap, option, future, or forward
agreement; an equity index or equity swap, option,
future, or forward agreement; a debt index or debt
swap, option, future, or forward agreement; a total
return, credit spread or credit swap, option, future,
or forward agreement; a commodity index or commodity
swap, option, future, or forward agreement; or a
weather swap, weather derivative, or weather option;
``(II) any agreement or transaction that is similar
to any other agreement or transaction referred to in
this clause and that is of a type that has been, is
presently, or in the future becomes, the subject of
recurrent dealings in the swap markets (including terms
and conditions incorporated by reference in such
agreement) and that is a forward, swap, future, or
option on one or more rates, currencies, commodities,
equity securities or other equity instruments, debt
securities or other debt instruments, quantitative
measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or
financial indices or measures of economic or financial
risk or value;
``(III) any combination of agreements or
transactions referred to in this clause;
``(IV) any option to enter into any agreement or
transaction referred to in this clause;
``(V) a master agreement that provides for an
agreement or transaction referred to in subclause (I),
(II), (III), or (IV), together with all supplements to
any such master agreement, without regard to whether
the master agreement contains an agreement or
transaction that is not a swap agreement under this
clause, except that the master agreement shall be
considered to be a swap agreement under this clause
only with respect to each agreement or transaction
under the master agreement that is referred to in
subclause (I), (II), (III), or (IV); and
``(VI) any security agreement or arrangement or
other credit enhancement related to any agreements or
transactions referred to in subclause (I), (II), (III),
(IV), or (V), including any guarantee or reimbursement
obligation in connection with any agreement or
transaction referred to in any such subclause.
Such term is applicable for purposes of this subsection
only and shall not be construed or applied so as to
challenge or affect the characterization, definition, or
treatment of any swap agreement under any other statute,
regulation, or rule, including the Securities Act of 1933,
the Securities Exchange Act of 1934, the Public Utility
Holding Company Act of 1935, the Trust Indenture Act of
1939, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Investor Protection
Act of 1970, the Commodity Exchange Act, the Gramm-Leach-
Bliley Act, and the Legal Certainty for Bank Products Act
of 2000.''.
(2) Insured credit unions.--Section 207(c)(8)(D) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended by adding at
the end the following new clause:
``(vi) Swap agreement.--The term `swap agreement'
means--
``(I) any agreement, including the terms and
conditions incorporated by reference in any such
agreement, which is an interest rate swap, option,
future, or forward agreement, including a rate floor,
rate cap, rate collar, cross-currency rate swap, and
basis swap; a spot, same day-tomorrow, tomorrow-next,
forward, or other foreign exchange or precious metals
agreement; a currency swap, option, future, or forward
agreement; an equity index or equity swap, option,
future, or forward agreement; a debt index or debt
swap, option, future, or forward agreement; a total
return, credit spread or credit swap, option, future,
or forward agreement; a commodity index or commodity
swap, option, future, or forward agreement; or a
weather swap, weather derivative, or weather option;
``(II) any agreement or transaction that is similar
to any other agreement or transaction referred to in
this clause and that is of a type that has been, is
presently, or in the future becomes, the subject of
recurrent dealings in the swap markets (including terms
and conditions incorporated by reference in such
agreement) and that is a forward, swap, future, or
option on one or more rates, currencies, commodities,
equity securities or other equity instruments, debt
securities or other debt instruments, quantitative
measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or
financial indices or measures of economic or financial
risk or value;
``(III) any combination of agreements or
transactions referred to in this clause;
``(IV) any option to enter into any agreement or
transaction referred to in this clause;
``(V) a master agreement that provides for an
agreement or transaction referred to in subclause (I),
(II), (III), or (IV), together with all supplements to
any such master agreement, without regard to whether
the master agreement contains an agreement or
transaction that is not a swap agreement under this
clause, except that the master agreement shall be
considered to be a swap agreement under this clause
only with respect to each agreement or transaction
under the master agreement that is referred to in
subclause (I), (II), (III), or (IV); and
``(VI) any security agreement or arrangement or
other credit enhancement related to any agreements or
transactions referred to in subclause (I), (II), (III),
(IV), or (V), including any guarantee or reimbursement
obligation in connection with any agreement or
transaction referred to in any such subclause.
Such term is applicable for purposes of this subsection
only and shall not be construed or applied so as to
challenge or affect the characterization, definition, or
treatment of any swap agreement under any other statute,
regulation, or rule, including the Securities Act of 1933,
the Securities Exchange Act of 1934, the Public Utility
Holding Company Act of 1935, the Trust Indenture Act of
1939, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Investor Protection
Act of 1970, the Commodity Exchange Act, the Gramm-Leach-
Bliley Act, and the Legal Certainty for Bank Products Act
of 2000.''.
(g) Definition of Transfer.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(D)(viii)) is amended to read as follows:
``(viii) Transfer.--The term `transfer' means every
mode, direct or indirect, absolute or conditional,
voluntary or involuntary, of disposing of or parting with
property or with an interest in property, including
retention of title as a security interest and foreclosure
of the depository institution's equity of redemption.''.
(2) Insured credit unions.--Section 207(c)(8)(D) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(8)(D)) (as amended by
subsection (f) of this section) is amended by adding at the end the
following new clause:
``(viii) Transfer.--The term `transfer' means every
mode, direct or indirect, absolute or conditional,
voluntary or involuntary, of disposing of or parting with
property or with an interest in property, including
retention of title as a security interest and foreclosure
of the depository institution's equity of redemption.''.
(h) Treatment of Qualified Financial Contracts.--
(1) FDIC-insured depository institutions.--Section 11(e)(8) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is
amended--
(A) in subparagraph (A)--
(i) by striking ``paragraph (10)'' and inserting
``paragraphs (9) and (10)'';
(ii) in clause (i), by striking ``to cause the
termination or liquidation'' and inserting ``such person
has to cause the termination, liquidation, or
acceleration''; and
(iii) by striking clause (ii) and inserting the
following new clause:
``(ii) any right under any security agreement or
arrangement or other credit enhancement related to one or
more qualified financial contracts described in clause
(i);''; and
(B) in subparagraph (E), by striking clause (ii) and
inserting the following:
``(ii) any right under any security agreement or
arrangement or other credit enhancement related to one or
more qualified financial contracts described in clause
(i);''.
(2) Insured credit unions.--Section 207(c)(8) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(8)) is amended--
(A) in subparagraph (A)--
(i) by striking ``paragraph (12)'' and inserting
``paragraphs (9) and (10)'';
(ii) in clause (i), by striking ``to cause the
termination or liquidation'' and inserting ``such person
has to cause the termination, liquidation, or
acceleration''; and
(iii) by striking clause (ii) and inserting the
following new clause:
``(ii) any right under any security agreement or
arrangement or other credit enhancement related to 1 or
more qualified financial contracts described in clause
(i);''; and
(B) in subparagraph (E), by striking clause (ii) and
inserting the following new clause:
``(ii) any right under any security agreement or
arrangement or other credit enhancement related to 1 or
more qualified financial contracts described in clause
(i);''.
(i) Avoidance of Transfers.--
(1) FDIC-insured depository institutions.--Section
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(8)(C)(i)) is amended by inserting ``section 5242 of the
Revised Statutes of the United States or any other Federal or State
law relating to the avoidance of preferential or fraudulent
transfers,'' before ``the Corporation''.
(2) Insured credit unions.--Section 207(c)(8)(C)(i) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(C)(i)) is amended by
inserting ``section 5242 of the Revised Statutes of the United
States or any other Federal or State law relating to the avoidance
of preferential or fraudulent transfers,'' before ``the Board''.
SEC. 902. AUTHORITY OF THE FDIC AND NCUAB WITH RESPECT TO FAILED AND
FAILING INSTITUTIONS.
(a) Federal Deposit Insurance Corporation.--
(1) In general.--Section 11(e)(8) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(A) in subparagraph (E), by striking ``other than paragraph
(12) of this subsection, subsection (d)(9)'' and inserting
``other than subsections (d)(9) and (e)(10)''; and
(B) by adding at the end the following new subparagraphs:
``(F) Clarification.--No provision of law shall be
construed as limiting the right or power of the Corporation, or
authorizing any court or agency to limit or delay, in any
manner, the right or power of the Corporation to transfer any
qualified financial contract in accordance with paragraphs (9)
and (10) of this subsection or to disaffirm or repudiate any
such contract in accordance with subsection (e)(1) of this
section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding the provisions of
subparagraphs (A) and (E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation Improvement Act of
1991, no walkaway clause shall be enforceable in a
qualified financial contract of an insured depository
institution in default.
``(ii) Walkaway clause defined.--For purposes of this
subparagraph, the term `walkaway clause' means a provision
in a qualified financial contract that, after calculation
of a value of a party's position or an amount due to or
from 1 of the parties in accordance with its terms upon
termination, liquidation, or acceleration of the qualified
financial contract, either does not create a payment
obligation of a party or extinguishes a payment obligation
of a party in whole or in part solely because of such
party's status as a nondefaulting party.''.
(2) Technical and conforming amendment.--Section 11(e)(12)(A)
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(12)(A)) is
amended by inserting ``or the exercise of rights or powers by''
after ``the appointment of''.
(b) National Credit Union Administration Board.--
(1) In general.--Section 207(c)(8) of the Federal Credit Union
Act (12 U.S.C. 1787(c)(8)) is amended--
(A) in subparagraph (E) (as amended by section 901(h)), by
striking ``other than paragraph (12) of this subsection,
subsection (b)(9)'' and inserting ``other than subsections
(b)(9) and (c)(10)''; and
(B) by adding at the end the following new subparagraphs:
``(F) Clarification.--No provision of law shall be
construed as limiting the right or power of the Board, or
authorizing any court or agency to limit or delay, in any
manner, the right or power of the Board to transfer any
qualified financial contract in accordance with paragraphs (9)
and (10) of this subsection or to disaffirm or repudiate any
such contract in accordance with subsection (c)(1) of this
section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding the provisions of
subparagraphs (A) and (E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation Improvement Act of
1991, no walkaway clause shall be enforceable in a
qualified financial contract of an insured credit union in
default.
``(ii) Walkaway clause defined.--For purposes of this
subparagraph, the term `walkaway clause' means a provision
in a qualified financial contract that, after calculation
of a value of a party's position or an amount due to or
from 1 of the parties in accordance with its terms upon
termination, liquidation, or acceleration of the qualified
financial contract, either does not create a payment
obligation of a party or extinguishes a payment obligation
of a party in whole or in part solely because of such
party's status as a nondefaulting party.''.
(2) Technical and conforming amendment.--Section 207(c)(12)(A)
of the Federal Credit Union Act (12 U.S.C. 1787(c)(12)(A)) is
amended by inserting ``or the exercise of rights or powers by''
after ``the appointment of''.
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL
CONTRACTS.
(a) FDIC-Insured Depository Institutions.--
(1) Transfers of Qualified Financial Contracts to Financial
Institutions.--Section 11(e)(9) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(9)) is amended to read as follows:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of assets or
liabilities of a depository institution in default which
includes any qualified financial contract, the conservator or
receiver for such depository institution shall either--
``(i) transfer to one financial institution, other than
a financial institution for which a conservator, receiver,
trustee in bankruptcy, or other legal custodian has been
appointed or which is otherwise the subject of a bankruptcy
or insolvency proceeding--
``(I) all qualified financial contracts between any
person or any affiliate of such person and the
depository institution in default;
``(II) all claims of such person or any affiliate
of such person against such depository institution
under any such contract (other than any claim which,
under the terms of any such contract, is subordinated
to the claims of general unsecured creditors of such
institution);
``(III) all claims of such depository institution
against such person or any affiliate of such person
under any such contract; and
``(IV) all property securing or any other credit
enhancement for any contract described in subclause (I)
or any claim described in subclause (II) or (III) under
any such contract; or
``(ii) transfer none of the qualified financial
contracts, claims, property or other credit enhancement
referred to in clause (i) (with respect to such person and
any affiliate of such person).
``(B) Transfer to foreign bank, foreign financial
institution, or branch or agency of a foreign bank or financial
institution.--In transferring any qualified financial contracts
and related claims and property under subparagraph (A)(i), the
conservator or receiver for the depository institution shall
not make such transfer to a foreign bank, financial institution
organized under the laws of a foreign country, or a branch or
agency of a foreign bank or financial institution unless, under
the law applicable to such bank, financial institution, branch
or agency, to the qualified financial contracts, and to any
netting contract, any security agreement or arrangement or
other credit enhancement related to one or more qualified
financial contracts, the contractual rights of the parties to
such qualified financial contracts, netting contracts, security
agreements or arrangements, or other credit enhancements are
enforceable substantially to the same extent as permitted under
this section.
``(C) Transfer of contracts subject to the rules of a
clearing organization.--In the event that a conservator or
receiver transfers any qualified financial contract and related
claims, property, and credit enhancements pursuant to
subparagraph (A)(i) and such contract is cleared by or subject
to the rules of a clearing organization, the clearing
organization shall not be required to accept the transferee as
a member by virtue of the transfer.
``(D) Definitions.--For purposes of this paragraph, the
term `financial institution' means a broker or dealer, a
depository institution, a futures commission merchant, or any
other institution, as determined by the Corporation by
regulation to be a financial institution, and the term
`clearing organization' has the same meaning as in section 402
of the Federal Deposit Insurance Corporation Improvement Act of
1991.''.
(2) Notice to qualified financial contract counterparties.--
Section 11(e)(10)(A) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(10)(A)) is amended in the material immediately
following clause (ii) by striking ``the conservator'' and all that
follows through the period and inserting the following: ``the
conservator or receiver shall notify any person who is a party to
any such contract of such transfer by 5:00 p.m. (eastern time) on
the business day following the date of the appointment of the
receiver in the case of a receivership, or the business day
following such transfer in the case of a conservatorship.''.
(3) Rights against receiver and conservator and treatment of
bridge banks.--Section 11(e)(10) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(10)) is amended--
(A) by redesignating subparagraph (B) as subparagraph (D);
and
(B) by inserting after subparagraph (A) the following new
subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is a party to a
qualified financial contract with an insured depository
institution may not exercise any right that such person has
to terminate, liquidate, or net such contract under
paragraph (8)(A) of this subsection or section 403 or 404
of the Federal Deposit Insurance Corporation Improvement
Act of 1991, solely by reason of or incidental to the
appointment of a receiver for the depository institution
(or the insolvency or financial condition of the depository
institution for which the receiver has been appointed)--
``(I) until 5:00 p.m. (eastern time) on the
business day following the date of the appointment of
the receiver; or
``(II) after the person has received notice that
the contract has been transferred pursuant to paragraph
(9)(A).
``(ii) Conservatorship.--A person who is a party to a
qualified financial contract with an insured depository
institution may not exercise any right that such person has
to terminate, liquidate, or net such contract under
paragraph (8)(E) of this subsection or section 403 or 404
of the Federal Deposit Insurance Corporation Improvement
Act of 1991, solely by reason of or incidental to the
appointment of a conservator for the depository institution
(or the insolvency or financial condition of the depository
institution for which the conservator has been appointed).
``(iii) Notice.--For purposes of this paragraph, the
Corporation as receiver or conservator of an insured
depository institution shall be deemed to have notified a
person who is a party to a qualified financial contract
with such depository institution if the Corporation has
taken steps reasonably calculated to provide notice to such
person by the time specified in subparagraph (A).
``(C) Treatment of bridge banks.--The following
institutions shall not be considered to be a financial
institution for which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy or insolvency
proceeding for purposes of paragraph (9):
``(i) A bridge bank.
``(ii) A depository institution organized by the
Corporation, for which a conservator is appointed either--
``(I) immediately upon the organization of the
institution; or
``(II) at the time of a purchase and assumption
transaction between the depository institution and the
Corporation as receiver for a depository institution in
default.''.
(b) Insured Credit Unions.--
(1) Transfers of qualified financial contracts to financial
institutions.--Section 207(c)(9) of the Federal Credit Union Act
(12 U.S.C. 1787(c)(9)) is amended to read as follows:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of assets or
liabilities of a credit union in default which includes any
qualified financial contract, the conservator or liquidating
agent for such credit union shall either--
``(i) transfer to 1 financial institution, other than a
financial institution for which a conservator, receiver,
trustee in bankruptcy, or other legal custodian has been
appointed or which is otherwise the subject of a bankruptcy
or insolvency proceeding--
``(I) all qualified financial contracts between any
person or any affiliate of such person and the credit
union in default;
``(II) all claims of such person or any affiliate
of such person against such credit union under any such
contract (other than any claim which, under the terms
of any such contract, is subordinated to the claims of
general unsecured creditors of such credit union);
``(III) all claims of such credit union against
such person or any affiliate of such person under any
such contract; and
``(IV) all property securing or any other credit
enhancement for any contract described in subclause (I)
or any claim described in subclause (II) or (III) under
any such contract; or
``(ii) transfer none of the qualified financial
contracts, claims, property or other credit enhancement
referred to in clause (i) (with respect to such person and
any affiliate of such person).
``(B) Transfer to foreign bank, foreign financial
institution, or branch or agency of a foreign bank or financial
institution.--In transferring any qualified financial contracts
and related claims and property under subparagraph (A)(i), the
conservator or liquidating agent for the credit union shall not
make such transfer to a foreign bank, financial institution
organized under the laws of a foreign country, or a branch or
agency of a foreign bank or financial institution unless, under
the law applicable to such bank, financial institution, branch
or agency, to the qualified financial contracts, and to any
netting contract, any security agreement or arrangement or
other credit enhancement related to 1 or more qualified
financial contracts, the contractual rights of the parties to
such qualified financial contracts, netting contracts, security
agreements or arrangements, or other credit enhancements are
enforceable substantially to the same extent as permitted under
this section.
``(C) Transfer of contracts subject to the rules of a
clearing organization.--In the event that a conservator or
liquidating agent transfers any qualified financial contract
and related claims, property, and credit enhancements pursuant
to subparagraph (A)(i) and such contract is cleared by or
subject to the rules of a clearing organization, the clearing
organization shall not be required to accept the transferee as
a member by virtue of the transfer.
``(D) Definitions.--For purposes of this paragraph--
``(i) the term `financial institution' means a broker
or dealer, a depository institution, a futures commission
merchant, a credit union, or any other institution, as
determined by the Board by regulation to be a financial
institution; and
``(ii) the term `clearing organization' has the same
meaning as in section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991.''.
(2) Notice to qualified financial contract counterparties.--
Section 207(c)(10)(A) of the Federal Credit Union Act (12 U.S.C.
1787(c)(10)(A)) is amended in the material immediately following
clause (ii) by striking ``the conservator'' and all that follows
through the period and inserting the following: ``the conservator
or liquidating agent shall notify any person who is a party to any
such contract of such transfer by 5:00 p.m. (eastern time) on the
business day following the date of the appointment of the
liquidating agent in the case of a liquidation, or the business day
following such transfer in the case of a conservatorship.''.
(3) Rights against liquidating agent and conservator and
treatment of bridge banks.--Section 207(c)(10) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(10)) is amended--
(A) by redesignating subparagraph (B) as subparagraph (D);
and
(B) by inserting after subparagraph (A) the following new
subparagraphs:
``(B) Certain rights not enforceable.--
``(i) Liquidation.--A person who is a party to a
qualified financial contract with an insured credit union
may not exercise any right that such person has to
terminate, liquidate, or net such contract under paragraph
(8)(A) of this subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation Improvement Act of
1991, solely by reason of or incidental to the appointment
of a liquidating agent for the credit union institution (or
the insolvency or financial condition of the credit union
for which the liquidating agent has been appointed)--
``(I) until 5:00 p.m. (eastern time) on the
business day following the date of the appointment of
the liquidating agent; or
``(II) after the person has received notice that
the contract has been transferred pursuant to paragraph
(9)(A).
``(ii) Conservatorship.--A person who is a party to a
qualified financial contract with an insured credit union
may not exercise any right that such person has to
terminate, liquidate, or net such contract under paragraph
(8)(E) of this subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation Improvement Act of
1991, solely by reason of or incidental to the appointment
of a conservator for the credit union or the insolvency or
financial condition of the credit union for which the
conservator has been appointed).
``(iii) Notice.--For purposes of this paragraph, the
Board as conservator or liquidating agent of an insured
credit union shall be deemed to have notified a person who
is a party to a qualified financial contract with such
credit union if the Board has taken steps reasonably
calculated to provide notice to such person by the time
specified in subparagraph (A).
``(C) Treatment of bridge banks.--The following
institutions shall not be considered to be a financial
institution for which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy or insolvency
proceeding for purposes of paragraph (9):
``(i) A bridge bank.
``(ii) A credit union organized by the Board, for which
a conservator is appointed either--
``(I) immediately upon the organization of the
credit union; or
``(II) at the time of a purchase and assumption
transaction between the credit union and the Board as
receiver for a credit union in default.''.
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF
QUALIFIED FINANCIAL CONTRACTS.
(a) FDIC-Insured Depository Institutions.--Section 11(e) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is amended--
(1) by redesignating paragraphs (11) through (15) as paragraphs
(12) through (16), respectively;
(2) by inserting after paragraph (10) the following new
paragraph:
``(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of a conservator or receiver with respect to any
qualified financial contract to which an insured depository
institution is a party, the conservator or receiver for such
institution shall either--
``(A) disaffirm or repudiate all qualified financial
contracts between--
``(i) any person or any affiliate of such person; and
``(ii) the depository institution in default; or
``(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A) (with
respect to such person or any affiliate of such person).''; and
(3) by adding at the end the following new paragraph:
``(17) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection only, and
shall not be construed or applied so as to challenge or affect the
characterization, definition, or treatment of any similar terms
under any other statute, regulation, or rule, including the Gramm-
Leach-Bliley Act, the Legal Certainty for Bank Products Act of
2000, the securities laws (as that term is defined in section
3(a)(47) of the Securities Exchange Act of 1934), and the Commodity
Exchange Act.''.
(b) Insured Credit Unions.--Section 207(c) of the Federal Credit
Union Act (12 U.S.C. 1787(c)) is amended--
(1) by redesignating paragraphs (11), (12), and (13) as
paragraphs (12), (13), and (14), respectively;
(2) by inserting after paragraph (10) the following new
paragraph:
``(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of a conservator or liquidating agent with respect to
any qualified financial contract to which an insured credit union
is a party, the conservator or liquidating agent for such credit
union shall either--
``(A) disaffirm or repudiate all qualified financial
contracts between--
``(i) any person or any affiliate of such person; and
``(ii) the credit union in default; or
``(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A) (with
respect to such person or any affiliate of such person).''; and
(3) by adding at the end the following new paragraph:
``(15) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection only, and
shall not be construed or applied so as to challenge or affect the
characterization, definition, or treatment of any similar terms
under any other statute, regulation, or rule, including the Gramm-
Leach-Bliley Act, the Legal Certainty for Bank Products Act of
2000, the securities laws (as that term is defined in section
(a)(47) of the Securities Exchange Act of 1934), and the Commodity
Exchange Act.''.
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
(a) FDIC-Insured Depository Institutions.--Section 11(e)(8)(D)(vii)
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is
amended to read as follows:
``(vii) Treatment of master agreement as one
agreement.--Any master agreement for any contract or
agreement described in any preceding clause of this
subparagraph (or any master agreement for such master
agreement or agreements), together with all supplements to
such master agreement, shall be treated as a single
agreement and a single qualified financial contract. If a
master agreement contains provisions relating to agreements
or transactions that are not themselves qualified financial
contracts, the master agreement shall be deemed to be a
qualified financial contract only with respect to those
transactions that are themselves qualified financial
contracts.''.
(b) Insured Credit Unions.--Section 207(c)(8)(D) of the Federal
Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended by inserting
after clause (vi) (as added by section 901(f)) the following new
clause:
``(vii) Treatment of master agreement as one
agreement.--Any master agreement for any contract or
agreement described in any preceding clause of this
subparagraph (or any master agreement for such master
agreement or agreements), together with all supplements to
such master agreement, shall be treated as a single
agreement and a single qualified financial contract. If a
master agreement contains provisions relating to agreements
or transactions that are not themselves qualified financial
contracts, the master agreement shall be deemed to be a
qualified financial contract only with respect to those
transactions that are themselves qualified financial
contracts.''.
SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
1991.
(a) Definitions.--Section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4402) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)(ii), by inserting before the
semicolon ``, or is exempt from such registration by order of
the Securities and Exchange Commission''; and
(B) in subparagraph (B), by inserting before the period ``,
that has been granted an exemption under section 4(c)(1) of the
Commodity Exchange Act, or that is a multilateral clearing
organization (as defined in section 408 of this Act)'';
(2) in paragraph (6)--
(A) by redesignating subparagraphs (B) through (D) as
subparagraphs (C) through (E), respectively;
(B) by inserting after subparagraph (A) the following new
subparagraph:
``(B) an uninsured national bank or an uninsured State bank
that is a member of the Federal Reserve System, if the national
bank or State member bank is not eligible to make application
to become an insured bank under section 5 of the Federal
Deposit Insurance Act;''; and
(C) by amending subparagraph (C), so redesignated, to read
as follows:
``(C) a branch or agency of a foreign bank, a foreign bank
and any branch or agency of the foreign bank, or the foreign
bank that established the branch or agency, as those terms are
defined in section 1(b) of the International Banking Act of
1978;'';
(3) in paragraph (11), by inserting before the period ``and any
other clearing organization with which such clearing organization
has a netting contract'';
(4) by amending paragraph (14)(A)(i) to read as follows:
``(i) means a contract or agreement between 2 or more
financial institutions, clearing organizations, or members
that provides for netting present or future payment
obligations or payment entitlements (including liquidation
or close out values relating to such obligations or
entitlements) among the parties to the agreement; and'';
and
(5) by adding at the end the following new paragraph:
``(15) Payment.--The term `payment' means a payment of United
States dollars, another currency, or a composite currency, and a
noncash delivery, including a payment or delivery to liquidate an
unmatured obligation.''.
(b) Enforceability of Bilateral Netting Contracts.--Section 403 of
the Federal Deposit Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4403) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) General Rule.--Notwithstanding any other provision of State
or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of
section 11(e) of the Federal Deposit Insurance Act, paragraphs (8)(E),
(8)(F), and (10)(B) of section 207(c) of the Federal Credit Union Act,
or any order authorized under section 5(b)(2) of the Securities
Investor Protection Act of 1970), the covered contractual payment
obligations and the covered contractual payment entitlements between
any 2 financial institutions shall be netted in accordance with, and
subject to the conditions of, the terms of any applicable netting
contract (except as provided in section 561(b)(2) of title 11, United
States Code).''; and
(2) by adding at the end the following new subsection:
``(f) Enforceability of Security Agreements.--The provisions of any
security agreement or arrangement or other credit enhancement related
to one or more netting contracts between any 2 financial institutions
shall be enforceable in accordance with their terms (except as provided
in section 561(b)(2) of title 11, United States Code), and shall not be
stayed, avoided, or otherwise limited by any State or Federal law
(other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of
the Federal Deposit Insurance Act, paragraphs (8)(E), (8)(F), and
(10)(B) of section 207(c) of the Federal Credit Union Act, and section
5(b)(2) of the Securities Investor Protection Act of 1970).''.
(c) Enforceability of Clearing Organization Netting Contracts.--
Section 404 of the Federal Deposit Insurance Corporation Improvement
Act of 1991 (12 U.S.C. 4404) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) General Rule.--Notwithstanding any other provision of State
or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of
section 11(e) of the Federal Deposit Insurance Act, paragraphs (8)(E),
(8)(F), and (10)(B) of section 207(c) of the Federal Credit Union Act,
and any order authorized under section 5(b)(2) of the Securities
Investor Protection Act of 1970), the covered contractual payment
obligations and the covered contractual payment entitlements of a
member of a clearing organization to and from all other members of a
clearing organization shall be netted in accordance with and subject to
the conditions of any applicable netting contract (except as provided
in section 561(b)(2) of title 11, United States Code).''; and
(2) by adding at the end the following new subsection:
``(h) Enforceability of Security Agreements.--The provisions of any
security agreement or arrangement or other credit enhancement related
to one or more netting contracts between any 2 members of a clearing
organization shall be enforceable in accordance with their terms
(except as provided in section 561(b)(2) of title 11, United States
Code), and shall not be stayed, avoided, or otherwise limited by any
State or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B)
of section 11(e) of the Federal Deposit Insurance Act, paragraphs
(8)(E), (8)(F), and (10)(B) of section 207(c) of the Federal Credit
Union Act, and section 5(b)(2) of the Securities Investor Protection
Act of 1970).''.
(d) Enforceability of Contracts With Uninsured National Banks,
Uninsured Federal Branches and Agencies, Certain Uninsured State Member
Banks, and Edge Act Corporations.--The Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.) is
amended--
(1) by redesignating section 407 as section 407A; and
(2) by inserting after section 406 the following new section:
``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS,
UNINSURED FEDERAL BRANCHES AND AGENCIES, CERTAIN
UNINSURED STATE MEMBER BANKS, AND EDGE ACT CORPORATIONS.
``(a) In General.--Notwithstanding any other provision of law,
paragraphs (8), (9), (10), and (11) of section 11(e) of the Federal
Deposit Insurance Act shall apply to an uninsured national bank or
uninsured Federal branch or Federal agency, a corporation chartered
under section 25A of the Federal Reserve Act, or an uninsured State
member bank which operates, or operates as, a multilateral clearing
organization pursuant to section 409 of this Act, except that for such
purpose--
``(1) any reference to the `Corporation as receiver' or `the
receiver or the Corporation' shall refer to the receiver appointed
by the Comptroller of the Currency in the case of an uninsured
national bank or uninsured Federal branch or agency, or to the
receiver appointed by the Board of Governors of the Federal Reserve
System in the case of a corporation chartered under section 25A of
the Federal Reserve Act or an uninsured State member bank;
``(2) any reference to the `Corporation' (other than in section
11(e)(8)(D) of such Act), the `Corporation, whether acting as such
or as conservator or receiver', a `receiver', or a `conservator'
shall refer to the receiver or conservator appointed by the
Comptroller of the Currency in the case of an uninsured national
bank or uninsured Federal branch or agency, or to the receiver or
conservator appointed by the Board of Governors of the Federal
Reserve System in the case of a corporation chartered under section
25A of the Federal Reserve Act or an uninsured State member bank;
and
``(3) any reference to an `insured depository institution' or
`depository institution' shall refer to an uninsured national bank,
an uninsured Federal branch or Federal agency, a corporation
chartered under section 25A of the Federal Reserve Act, or an
uninsured State member bank which operates, or operates as, a
multilateral clearing organization pursuant to section 409 of this
Act.
``(b) Liability.--The liability of a receiver or conservator of an
uninsured national bank, uninsured Federal branch or agency, a
corporation chartered under section 25A of the Federal Reserve Act, or
an uninsured State member bank which operates, or operates as, a
multilateral clearing organization pursuant to section 409 of this Act,
shall be determined in the same manner and subject to the same
limitations that apply to receivers and conservators of insured
depository institutions under section 11(e) of the Federal Deposit
Insurance Act.
``(c) Regulatory Authority.--
``(1) In general.--The Comptroller of the Currency in the case
of an uninsured national bank or uninsured Federal branch or agency
and the Board of Governors of the Federal Reserve System in the
case of a corporation chartered under section 25A of the Federal
Reserve Act, or an uninsured State member bank that operates, or
operates as, a multilateral clearing organization pursuant to
section 409 of this Act, in consultation with the Federal Deposit
Insurance Corporation, may each promulgate regulations solely to
implement this section.
``(2) Specific requirement.--In promulgating regulations,
limited solely to implementing paragraphs (8), (9), (10), and (11)
of section 11(e) of the Federal Deposit Insurance Act, the
Comptroller of the Currency and the Board of Governors of the
Federal Reserve System each shall ensure that the regulations
generally are consistent with the regulations and policies of the
Federal Deposit Insurance Corporation adopted pursuant to the
Federal Deposit Insurance Act.
``(d) Definitions.--For purposes of this section, the terms
`Federal branch', `Federal agency', and `foreign bank' have the same
meanings as in section 1(b) of the International Banking Act of
1978.''.
SEC. 907. BANKRUPTCY LAW AMENDMENTS.
(a) Definitions of Forward Contract, Repurchase Agreement,
Securities Clearing Agency, Swap Agreement, Commodity Contract, and
Securities Contract.--Title 11, United States Code, is amended--
(1) in section 101--
(A) in paragraph (25)--
(i) by striking ``means a contract'' and inserting
``means--
``(A) a contract'';
(ii) by striking ``, or any combination thereof or
option thereon;'' and inserting ``, or any other similar
agreement;''; and
(iii) by adding at the end the following:
``(B) any combination of agreements or transactions
referred to in subparagraphs (A) and (C);
``(C) any option to enter into an agreement or transaction
referred to in subparagraph (A) or (B);
``(D) a master agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), or (C),
together with all supplements to any such master agreement,
without regard to whether such master agreement provides for an
agreement or transaction that is not a forward contract under
this paragraph, except that such master agreement shall be
considered to be a forward contract under this paragraph only
with respect to each agreement or transaction under such master
agreement that is referred to in subparagraph (A), (B), or (C);
or
``(E) any security agreement or arrangement, or other
credit enhancement related to any agreement or transaction
referred to in subparagraph (A), (B), (C), or (D), including
any guarantee or reimbursement obligation by or to a forward
contract merchant or financial participant in connection with
any agreement or transaction referred to in any such
subparagraph, but not to exceed the damages in connection with
any such agreement or transaction, measured in accordance with
section 562;'';
(B) in paragraph (46), by striking ``on any day during the
period beginning 90 days before the date of'' and inserting
``at any time before'';
(C) by amending paragraph (47) to read as follows:
``(47) `repurchase agreement' (which definition also applies to
a reverse repurchase agreement)--
``(A) means--
``(i) an agreement, including related terms, which
provides for the transfer of one or more certificates of
deposit, mortgage related securities (as defined in section
3 of the Securities Exchange Act of 1934), mortgage loans,
interests in mortgage related securities or mortgage loans,
eligible bankers' acceptances, qualified foreign government
securities (defined as a security that is a direct
obligation of, or that is fully guaranteed by, the central
government of a member of the Organization for Economic
Cooperation and Development), or securities that are direct
obligations of, or that are fully guaranteed by, the United
States or any agency of the United States against the
transfer of funds by the transferee of such certificates of
deposit, eligible bankers' acceptances, securities,
mortgage loans, or interests, with a simultaneous agreement
by such transferee to transfer to the transferor thereof
certificates of deposit, eligible bankers' acceptance,
securities, mortgage loans, or interests of the kind
described in this clause, at a date certain not later than
1 year after such transfer or on demand, against the
transfer of funds;
``(ii) any combination of agreements or transactions
referred to in clauses (i) and (iii);
``(iii) an option to enter into an agreement or
transaction referred to in clause (i) or (ii);
``(iv) a master agreement that provides for an
agreement or transaction referred to in clause (i), (ii),
or (iii), together with all supplements to any such master
agreement, without regard to whether such master agreement
provides for an agreement or transaction that is not a
repurchase agreement under this paragraph, except that such
master agreement shall be considered to be a repurchase
agreement under this paragraph only with respect to each
agreement or transaction under the master agreement that is
referred to in clause (i), (ii), or (iii); or
``(v) any security agreement or arrangement or other
credit enhancement related to any agreement or transaction
referred to in clause (i), (ii), (iii), or (iv), including
any guarantee or reimbursement obligation by or to a repo
participant or financial participant in connection with any
agreement or transaction referred to in any such clause,
but not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with
section 562 of this title; and
``(B) does not include a repurchase obligation under a
participation in a commercial mortgage loan;'';
(D) in paragraph (48), by inserting ``, or exempt from such
registration under such section pursuant to an order of the
Securities and Exchange Commission,'' after ``1934''; and
(E) by amending paragraph (53B) to read as follows:
``(53B) `swap agreement'--
``(A) means--
``(i) any agreement, including the terms and conditions
incorporated by reference in such agreement, which is--
``(I) an interest rate swap, option, future, or
forward agreement, including a rate floor, rate cap,
rate collar, cross-currency rate swap, and basis swap;
``(II) a spot, same day-tomorrow, tomorrow-next,
forward, or other foreign exchange or precious metals
agreement;
``(III) a currency swap, option, future, or forward
agreement;
``(IV) an equity index or equity swap, option,
future, or forward agreement;
``(V) a debt index or debt swap, option, future, or
forward agreement;
``(VI) a total return, credit spread or credit
swap, option, future, or forward agreement;
``(VII) a commodity index or a commodity swap,
option, future, or forward agreement; or
``(VIII) a weather swap, weather derivative, or
weather option;
``(ii) any agreement or transaction that is similar to
any other agreement or transaction referred to in this
paragraph and that--
``(I) is of a type that has been, is presently, or
in the future becomes, the subject of recurrent
dealings in the swap markets (including terms and
conditions incorporated by reference therein); and
``(II) is a forward, swap, future, or option on one
or more rates, currencies, commodities, equity
securities, or other equity instruments, debt
securities or other debt instruments, quantitative
measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or
financial indices or measures of economic or financial
risk or value;
``(iii) any combination of agreements or transactions
referred to in this subparagraph;
``(iv) any option to enter into an agreement or
transaction referred to in this subparagraph;
``(v) a master agreement that provides for an agreement
or transaction referred to in clause (i), (ii), (iii), or
(iv), together with all supplements to any such master
agreement, and without regard to whether the master
agreement contains an agreement or transaction that is not
a swap agreement under this paragraph, except that the
master agreement shall be considered to be a swap agreement
under this paragraph only with respect to each agreement or
transaction under the master agreement that is referred to
in clause (i), (ii), (iii), or (iv); or
``(vi) any security agreement or arrangement or other
credit enhancement related to any agreements or
transactions referred to in clause (i) through (v),
including any guarantee or reimbursement obligation by or
to a swap participant or financial participant in
connection with any agreement or transaction referred to in
any such clause, but not to exceed the damages in
connection with any such agreement or transaction, measured
in accordance with section 562; and
``(B) is applicable for purposes of this title only, and
shall not be construed or applied so as to challenge or affect
the characterization, definition, or treatment of any swap
agreement under any other statute, regulation, or rule,
including the Securities Act of 1933, the Securities Exchange
Act of 1934, the Public Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the Investment Company Act of
1940, the Investment Advisers Act of 1940, the Securities
Investor Protection Act of 1970, the Commodity Exchange Act,
the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank
Products Act of 2000;'';
(2) in section 741(7), by striking paragraph (7) and inserting
the following:
``(7) `securities contract'--
``(A) means--
``(i) a contract for the purchase, sale, or loan of a
security, a certificate of deposit, a mortgage loan or any
interest in a mortgage loan, a group or index of
securities, certificates of deposit, or mortgage loans or
interests therein (including an interest therein or based
on the value thereof), or option on any of the foregoing,
including an option to purchase or sell any such security,
certificate of deposit, mortgage loan, interest, group or
index, or option, and including any repurchase or reverse
repurchase transaction on any such security, certificate of
deposit, mortgage loan, interest, group or index, or
option;
``(ii) any option entered into on a national securities
exchange relating to foreign currencies;
``(iii) the guarantee by or to any securities clearing
agency of a settlement of cash, securities, certificates of
deposit, mortgage loans or interests therein, group or
index of securities, or mortgage loans or interests therein
(including any interest therein or based on the value
thereof), or option on any of the foregoing, including an
option to purchase or sell any such security, certificate
of deposit, mortgage loan, interest, group or index, or
option;
``(iv) any margin loan;
``(v) any other agreement or transaction that is
similar to an agreement or transaction referred to in this
subparagraph;
``(vi) any combination of the agreements or
transactions referred to in this subparagraph;
``(vii) any option to enter into any agreement or
transaction referred to in this subparagraph;
``(viii) a master agreement that provides for an
agreement or transaction referred to in clause (i), (ii),
(iii), (iv), (v), (vi), or (vii), together with all
supplements to any such master agreement, without regard to
whether the master agreement provides for an agreement or
transaction that is not a securities contract under this
subparagraph, except that such master agreement shall be
considered to be a securities contract under this
subparagraph only with respect to each agreement or
transaction under such master agreement that is referred to
in clause (i), (ii), (iii), (iv), (v), (vi), or (vii); or
``(ix) any security agreement or arrangement or other
credit enhancement related to any agreement or transaction
referred to in this subparagraph, including any guarantee
or reimbursement obligation by or to a stockbroker,
securities clearing agency, financial institution, or
financial participant in connection with any agreement or
transaction referred to in this subparagraph, but not to
exceed the damages in connection with any such agreement or
transaction, measured in accordance with section 562; and
``(B) does not include any purchase, sale, or repurchase
obligation under a participation in a commercial mortgage
loan;''; and
(3) in section 761(4)--
(A) by striking ``or'' at the end of subparagraph (D); and
(B) by adding at the end the following:
``(F) any other agreement or transaction that is similar to
an agreement or transaction referred to in this paragraph;
``(G) any combination of the agreements or transactions
referred to in this paragraph;
``(H) any option to enter into an agreement or transaction
referred to in this paragraph;
``(I) a master agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), (C), (D),
(E), (F), (G), or (H), together with all supplements to such
master agreement, without regard to whether the master
agreement provides for an agreement or transaction that is not
a commodity contract under this paragraph, except that the
master agreement shall be considered to be a commodity contract
under this paragraph only with respect to each agreement or
transaction under the master agreement that is referred to in
subparagraph (A), (B), (C), (D), (E), (F), (G), or (H); or
``(J) any security agreement or arrangement or other credit
enhancement related to any agreement or transaction referred to
in this paragraph, including any guarantee or reimbursement
obligation by or to a commodity broker or financial participant
in connection with any agreement or transaction referred to in
this paragraph, but not to exceed the damages in connection
with any such agreement or transaction, measured in accordance
with section 562;''.
(b) Definitions of Financial Institution, Financial Participant,
and Forward Contract Merchant.--Section 101 of title 11, United States
Code, is amended--
(1) by striking paragraph (22) and inserting the following:
``(22) `financial institution' means--
``(A) a Federal reserve bank, or an entity (domestic or
foreign) that is a commercial or savings bank, industrial
savings bank, savings and loan association, trust company,
federally-insured credit union, or receiver, liquidating agent,
or conservator for such entity and, when any such Federal
reserve bank, receiver, liquidating agent, conservator or
entity is acting as agent or custodian for a customer in
connection with a securities contract (as defined in section
741) such customer; or
``(B) in connection with a securities contract (as defined
in section 741) an investment company registered under the
Investment Company Act of 1940;'';
(2) by inserting after paragraph (22) the following:
``(22A) `financial participant' means--
``(A) an entity that, at the time it enters into a
securities contract, commodity contract, swap agreement,
repurchase agreement, or forward contract, or at the time of
the date of the filing of the petition, has one or more
agreements or transactions described in paragraph (1), (2),
(3), (4), (5), or (6) of section 561(a) with the debtor or any
other entity (other than an affiliate) of a total gross dollar
value of not less than $1,000,000,000 in notional or actual
principal amount outstanding on any day during the previous 15-
month period, or has gross mark-to-market positions of not less
than $100,000,000 (aggregated across counterparties) in one or
more such agreements or transactions with the debtor or any
other entity (other than an affiliate) on any day during the
previous 15-month period; or
``(B) a clearing organization (as defined in section 402 of
the Federal Deposit Insurance Corporation Improvement Act of
1991);''; and
(3) by striking paragraph (26) and inserting the following:
``(26) `forward contract merchant' means a Federal reserve
bank, or an entity the business of which consists in whole or in
part of entering into forward contracts as or with merchants in a
commodity (as defined in section 761) or any similar good, article,
service, right, or interest which is presently or in the future
becomes the subject of dealing in the forward contract trade;''.
(c) Definition of Master Netting Agreement and Master Netting
Agreement Participant.--Section 101 of title 11, United States Code, is
amended by inserting after paragraph (38) the following new paragraphs:
``(38A) `master netting agreement'--
``(A) means an agreement providing for the exercise of
rights, including rights of netting, setoff, liquidation,
termination, acceleration, or close out, under or in connection
with one or more contracts that are described in any one or
more of paragraphs (1) through (5) of section 561(a), or any
security agreement or arrangement or other credit enhancement
related to one or more of the foregoing, including any
guarantee or reimbursement obligation related to 1 or more of
the foregoing; and
``(B) if the agreement contains provisions relating to
agreements or transactions that are not contracts described in
paragraphs (1) through (5) of section 561(a), shall be deemed
to be a master netting agreement only with respect to those
agreements or transactions that are described in any one or
more of paragraphs (1) through (5) of section 561(a);
``(38B) `master netting agreement participant' means an entity
that, at any time before the date of the filing of the petition, is
a party to an outstanding master netting agreement with the
debtor;''.
(d) Swap Agreements, Securities Contracts, Commodity Contracts,
Forward Contracts, Repurchase Agreements, and Master Netting Agreements
Under the Automatic-Stay.--
(1) In general.--Section 362(b) of title 11, United States
Code, as amended by sections 224, 303, 311, 401, and 718, is
amended--
(A) in paragraph (6), by inserting ``, pledged to, under
the control of,'' after ``held by'';
(B) in paragraph (7), by inserting ``, pledged to, under
the control of,'' after ``held by'';
(C) by striking paragraph (17) and inserting the following:
``(17) under subsection (a), of the setoff by a swap
participant or financial participant of a mutual debt and claim
under or in connection with one or more swap agreements that
constitutes the setoff of a claim against the debtor for any
payment or other transfer of property due from the debtor under or
in connection with any swap agreement against any payment due to
the debtor from the swap participant or financial participant under
or in connection with any swap agreement or against cash,
securities, or other property held by, pledged to, under the
control of, or due from such swap participant or financial
participant to margin, guarantee, secure, or settle any swap
agreement;''; and
(D) by inserting after paragraph (26) the following:
``(27) under subsection (a), of the setoff by a master netting
agreement participant of a mutual debt and claim under or in
connection with one or more master netting agreements or any
contract or agreement subject to such agreements that constitutes
the setoff of a claim against the debtor for any payment or other
transfer of property due from the debtor under or in connection
with such agreements or any contract or agreement subject to such
agreements against any payment due to the debtor from such master
netting agreement participant under or in connection with such
agreements or any contract or agreement subject to such agreements
or against cash, securities, or other property held by, pledged to,
under the control of, or due from such master netting agreement
participant to margin, guarantee, secure, or settle such agreements
or any contract or agreement subject to such agreements, to the
extent that such participant is eligible to exercise such offset
rights under paragraph (6), (7), or (17) for each individual
contract covered by the master netting agreement in issue; and''.
(2) Limitation.--Section 362 of title 11, United States Code,
as amended by sections 106, 305, 311, and 441, is amended by adding
at the end the following:
``(o) The exercise of rights not subject to the stay arising under
subsection (a) pursuant to paragraph (6), (7), (17), or (27) of
subsection (b) shall not be stayed by any order of a court or
administrative agency in any proceeding under this title.''.
(e) Limitation of Avoidance Powers Under Master Netting
Agreement.--Section 546 of title 11, United States Code, is amended--
(1) in subsection (g) (as added by section 103 of Public Law
101-311)--
(A) by striking ``under a swap agreement'';
(B) by striking ``in connection with a swap agreement'' and
inserting ``under or in connection with any swap agreement'';
and
(C) by inserting ``or financial participant'' after ``swap
participant''; and
(2) by adding at the end the following:
``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and
548(b) the trustee may not avoid a transfer made by or to a master
netting agreement participant under or in connection with any master
netting agreement or any individual contract covered thereby that is
made before the commencement of the case, except under section
548(a)(1)(A) and except to the extent that the trustee could otherwise
avoid such a transfer made under an individual contract covered by such
master netting agreement.''.
(f) Fraudulent Transfers of Master Netting Agreements.--Section
548(d)(2) of title 11, United States Code, is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking the period and inserting
``; and''; and
(3) by adding at the end the following new subparagraph:
``(E) a master netting agreement participant that receives a
transfer in connection with a master netting agreement or any
individual contract covered thereby takes for value to the extent
of such transfer, except that, with respect to a transfer under any
individual contract covered thereby, to the extent that such master
netting agreement participant otherwise did not take (or is
otherwise not deemed to have taken) such transfer for value.''.
(g) Termination or Acceleration of Securities Contracts.--Section
555 of title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
``Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract'';
and
(2) in the first sentence, by striking ``liquidation'' and
inserting ``liquidation, termination, or acceleration''.
(h) Termination or Acceleration of Commodities or Forward
Contracts.--Section 556 of title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
``Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract'';
(2) in the first sentence, by striking ``liquidation'' and
inserting ``liquidation, termination, or acceleration''; and
(3) in the second sentence, by striking ``As used'' and all
that follows through ``right,'' and inserting ``As used in this
section, the term `contractual right' includes a right set forth in
a rule or bylaw of a derivatives clearing organization (as defined
in the Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991), a national securities
exchange, a national securities association, a securities clearing
agency, a contract market designated under the Commodity Exchange
Act, a derivatives transaction execution facility registered under
the Commodity Exchange Act, or a board of trade (as defined in the
Commodity Exchange Act) or in a resolution of the governing board
thereof and a right,''.
(i) Termination or Acceleration of Repurchase Agreements.--Section
559 of title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
``Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement'';
(2) in the first sentence, by striking ``liquidation'' and
inserting ``liquidation, termination, or acceleration''; and
(3) in the third sentence, by striking ``As used'' and all that
follows through ``right,'' and inserting ``As used in this section,
the term `contractual right' includes a right set forth in a rule
or bylaw of a derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization (as
defined in the Federal Deposit Insurance Corporation Improvement
Act of 1991), a national securities exchange, a national securities
association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity
Exchange Act) or in a resolution of the governing board thereof and
a right,''.
(j) Liquidation, Termination, or Acceleration of Swap Agreements.--
Section 560 of title 11, United States Code, is amended--
(1) by amending the section heading to read as follows:
``Sec. 560. Contractual right to liquidate, terminate, or accelerate a
swap agreement'';
(2) in the first sentence, by striking ``termination of a swap
agreement'' and inserting ``liquidation, termination, or
acceleration of one or more swap agreements'';
(3) by striking ``in connection with any swap agreement'' and
inserting ``in connection with the termination, liquidation, or
acceleration of one or more swap agreements''; and
(4) in the second sentence, by striking ``As used'' and all
that follows through ``right,'' and inserting ``As used in this
section, the term `contractual right' includes a right set forth in
a rule or bylaw of a derivatives clearing organization (as defined
in the Commodity Exchange Act), a multilateral clearing
organization (as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991), a national securities
exchange, a national securities association, a securities clearing
agency, a contract market designated under the Commodity Exchange
Act, a derivatives transaction execution facility registered under
the Commodity Exchange Act, or a board of trade (as defined in the
Commodity Exchange Act) or in a resolution of the governing board
thereof and a right,''.
(k) Liquidation, Termination, Acceleration, or Offset Under a
Master Netting Agreement and Across Contracts.--
(1) In general.--Title 11, United States Code, is amended by
inserting after section 560 the following:
``Sec. 561. Contractual right to terminate, liquidate, accelerate, or
offset under a master netting agreement and across
contracts; proceedings under chapter 15
``(a) Subject to subsection (b), the exercise of any contractual
right, because of a condition of the kind specified in section
365(e)(1), to cause the termination, liquidation, or acceleration of or
to offset or net termination values, payment amounts, or other transfer
obligations arising under or in connection with one or more (or the
termination, liquidation, or acceleration of one or more)--
``(1) securities contracts, as defined in section 741(7);
``(2) commodity contracts, as defined in section 761(4);
``(3) forward contracts;
``(4) repurchase agreements;
``(5) swap agreements; or
``(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation of any
provision of this title or by any order of a court or administrative
agency in any proceeding under this title.
``(b)(1) A party may exercise a contractual right described in
subsection (a) to terminate, liquidate, or accelerate only to the
extent that such party could exercise such a right under section 555,
556, 559, or 560 for each individual contract covered by the master
netting agreement in issue.
``(2) If a debtor is a commodity broker subject to subchapter IV of
chapter 7--
``(A) a party may not net or offset an obligation to the debtor
arising under, or in connection with, a commodity contract traded
on or subject to the rules of a contract market designated under
the Commodity Exchange Act or a derivatives transaction execution
facility registered under the Commodity Exchange Act against any
claim arising under, or in connection with, other instruments,
contracts, or agreements listed in subsection (a) except to the
extent that the party has positive net equity in the commodity
accounts at the debtor, as calculated under such subchapter; and
``(B) another commodity broker may not net or offset an
obligation to the debtor arising under, or in connection with, a
commodity contract entered into or held on behalf of a customer of
the debtor and traded on or subject to the rules of a contract
market designated under the Commodity Exchange Act or a derivatives
transaction execution facility registered under the Commodity
Exchange Act against any claim arising under, or in connection
with, other instruments, contracts, or agreements listed in
subsection (a).
``(3) No provision of subparagraph (A) or (B) of paragraph (2)
shall prohibit the offset of claims and obligations that arise under--
``(A) a cross-margining agreement or similar arrangement that
has been approved by the Commodity Futures Trading Commission or
submitted to the Commodity Futures Trading Commission under
paragraph (1) or (2) of section 5c(c) of the Commodity Exchange Act
and has not been abrogated or rendered ineffective by the Commodity
Futures Trading Commission; or
``(B) any other netting agreement between a clearing
organization (as defined in section 761) and another entity that
has been approved by the Commodity Futures Trading Commission.
``(c) As used in this section, the term `contractual right'
includes a right set forth in a rule or bylaw of a derivatives clearing
organization (as defined in the Commodity Exchange Act), a multilateral
clearing organization (as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991), a national securities exchange, a
national securities association, a securities clearing agency, a
contract market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered under the
Commodity Exchange Act, or a board of trade (as defined in the
Commodity Exchange Act) or in a resolution of the governing board
thereof, and a right, whether or not evidenced in writing, arising
under common law, under law merchant, or by reason of normal business
practice.
``(d) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repurchase
agreements, swap agreements, or master netting agreements shall apply
in a case under chapter 15, so that enforcement of contractual
provisions of such contracts and agreements in accordance with their
terms will not be stayed or otherwise limited by operation of any
provision of this title or by order of a court in any case under this
title, and to limit avoidance powers to the same extent as in a
proceeding under chapter 7 or 11 of this title (such enforcement not to
be limited based on the presence or absence of assets of the debtor in
the United States).''.
(2) Conforming amendment.--The table of sections for chapter 5
of title 11, United States Code, is amended by inserting after the
item relating to section 560 the following:
``561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts;
proceedings under chapter 15.''.
(l) Commodity Broker Liquidations.--Title 11, United States Code,
is amended by inserting after section 766 the following:
``Sec. 767. Commodity broker liquidation and forward contract
merchants, commodity brokers, stockbrokers, financial
institutions, financial participants, securities clearing
agencies, swap participants, repo participants, and master
netting agreement participants
``Notwithstanding any other provision of this title, the exercise
of rights by a forward contract merchant, commodity broker,
stockbroker, financial institution, financial participant, securities
clearing agency, swap participant, repo participant, or master netting
agreement participant under this title shall not affect the priority of
any unsecured claim it may have after the exercise of such rights.''.
(m) Stockbroker Liquidations.--Title 11, United States Code, is
amended by inserting after section 752 the following:
``Sec. 753. Stockbroker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions,
financial participants, securities clearing agencies, swap
participants, repo participants, and master netting
agreement participants
``Notwithstanding any other provision of this title, the exercise
of rights by a forward contract merchant, commodity broker,
stockbroker, financial institution, financial participant, securities
clearing agency, swap participant, repo participant, or master netting
agreement participant under this title shall not affect the priority of
any unsecured claim it may have after the exercise of such rights.''.
(n) Setoff.--Section 553 of title 11, United States Code, is
amended--
(1) in subsection (a)(2)(B)(ii), by inserting before the
semicolon the following: ``(except for a setoff of a kind described
in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556,
559, 560, or 561)'';
(2) in subsection (a)(3)(C), by inserting before the period the
following: ``(except for a setoff of a kind described in section
362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560,
or 561)''; and
(3) in subsection (b)(1), by striking ``362(b)(14),'' and
inserting ``362(b)(17), 362(b)(27), 555, 556, 559, 560, 561,''.
(o) Securities Contracts, Commodity Contracts, and Forward
Contracts.--Title 11, United States Code, is amended--
(1) in section 362(b)(6), by striking ``financial
institutions,'' each place such term appears and inserting
``financial institution, financial participant,'';
(2) in sections 362(b)(7) and 546(f), by inserting ``or
financial participant'' after ``repo participant'' each place such
term appears;
(3) in section 546(e), by inserting ``financial participant,''
after ``financial institution,'';
(4) in section 548(d)(2)(B), by inserting ``financial
participant,'' after ``financial institution,'';
(5) in section 548(d)(2)(C), by inserting ``or financial
participant'' after ``repo participant'';
(6) in section 548(d)(2)(D), by inserting ``or financial
participant'' after ``swap participant'';
(7) in section 555--
(A) by inserting ``financial participant,'' after
``financial institution,''; and
(B) by striking the second sentence and inserting the
following: ``As used in this section, the term `contractual
right' includes a right set forth in a rule or bylaw of a
derivatives clearing organization (as defined in the Commodity
Exchange Act), a multilateral clearing organization (as defined
in the Federal Deposit Insurance Corporation Improvement Act of
1991), a national securities exchange, a national securities
association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity
Exchange Act), or in a resolution of the governing board
thereof, and a right, whether or not in writing, arising under
common law, under law merchant, or by reason of normal business
practice.'';
(8) in section 556, by inserting ``, financial participant,''
after ``commodity broker'';
(9) in section 559, by inserting ``or financial participant''
after ``repo participant'' each place such term appears; and
(10) in section 560, by inserting ``or financial participant''
after ``swap participant''.
(p) Conforming Amendments.--Title 11, United States Code, is
amended--
(1) in the table of sections for chapter 5--
(A) by amending the items relating to sections 555 and 556
to read as follows:
``555. Contractual right to liquidate, terminate, or accelerate a
securities contract.
``556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract.'';
and
(B) by amending the items relating to sections 559 and 560
to read as follows:
``559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement.
``560. Contractual right to liquidate, terminate, or accelerate a swap
agreement.'';
and
(2) in the table of sections for chapter 7--
(A) by inserting after the item relating to section 766 the
following:
``767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions,
financial participants, securities clearing agencies, swap
participants, repo participants, and master netting agreement
participants.'';
and
(B) by inserting after the item relating to section 752 the
following:
``753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, financial
participants, securities clearing agencies, swap participants,
repo participants, and master netting agreement
participants.''.
SEC. 908. RECORDKEEPING REQUIREMENTS.
(a) FDIC-Insured Depository Institutions.--Section 11(e)(8) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended by
adding at the end the following new subparagraph:
``(H) Recordkeeping requirements.--The Corporation, in
consultation with the appropriate Federal banking agencies, may
prescribe regulations requiring more detailed recordkeeping by
any insured depository institution with respect to qualified
financial contracts (including market valuations) only if such
insured depository institution is in a troubled condition (as
such term is defined by the Corporation pursuant to section
32).''.
(b) Insured Credit Unions.--Section 207(c)(8) of the Federal Credit
Union Act (12 U.S.C. 1787(c)(8)) is amended by adding at the end the
following new subparagraph:
``(H) Recordkeeping requirements.--The Board, in
consultation with the appropriate Federal banking agencies, may
prescribe regulations requiring more detailed recordkeeping by
any insured credit union with respect to qualified financial
contracts (including market valuations) only if such insured
credit union is in a troubled condition (as such term is
defined by the Board pursuant to section 212).''.
SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.
Section 13(e)(2) of the Federal Deposit Insurance Act (12 U.S.C.
1823(e)(2)) is amended to read as follows:
``(2) Exemptions from contemporaneous execution requirement.--
An agreement to provide for the lawful collateralization of--
``(A) deposits of, or other credit extension by, a Federal,
State, or local governmental entity, or of any depositor
referred to in section 11(a)(2), including an agreement to
provide collateral in lieu of a surety bond;
``(B) bankruptcy estate funds pursuant to section 345(b)(2)
of title 11, United States Code;
``(C) extensions of credit, including any overdraft, from a
Federal reserve bank or Federal home loan bank; or
``(D) one or more qualified financial contracts, as defined
in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph (1)(B) solely
because such agreement was not executed contemporaneously with the
acquisition of the collateral or because of pledges, delivery, or
substitution of the collateral made in accordance with such
agreement.''.
SEC. 910. DAMAGE MEASURE.
(a) In General.--Title 11, United States Code, is amended--
(1) by inserting after section 561, as added by section 907,
the following:
``Sec. 562. Timing of damage measurement in connection with swap
agreements, securities contracts, forward contracts,
commodity contracts, repurchase agreements, and master
netting agreements
``(a) If the trustee rejects a swap agreement, securities contract
(as defined in section 741), forward contract, commodity contract (as
defined in section 761), repurchase agreement, or master netting
agreement pursuant to section 365(a), or if a forward contract
merchant, stockbroker, financial institution, securities clearing
agency, repo participant, financial participant, master netting
agreement participant, or swap participant liquidates, terminates, or
accelerates such contract or agreement, damages shall be measured as of
the earlier of--
``(1) the date of such rejection; or
``(2) the date or dates of such liquidation, termination, or
acceleration.
``(b) If there are not any commercially reasonable determinants of
value as of any date referred to in paragraph (1) or (2) of subsection
(a), damages shall be measured as of the earliest subsequent date or
dates on which there are commercially reasonable determinants of value.
``(c) For the purposes of subsection (b), if damages are not
measured as of the date or dates of rejection, liquidation,
termination, or acceleration, and the forward contract merchant,
stockbroker, financial institution, securities clearing agency, repo
participant, financial participant, master netting agreement
participant, or swap participant or the trustee objects to the timing
of the measurement of damages--
``(1) the trustee, in the case of an objection by a forward
contract merchant, stockbroker, financial institution, securities
clearing agency, repo participant, financial participant, master
netting agreement participant, or swap participant; or
``(2) the forward contract merchant, stockbroker, financial
institution, securities clearing agency, repo participant,
financial participant, master netting agreement participant, or
swap participant, in the case of an objection by the trustee,
has the burden of proving that there were no commercially reasonable
determinants of value as of such date or dates.''; and
(2) in the table of sections for chapter 5, by inserting after
the item relating to section 561 (as added by section 907) the
following new item:
``562. Timing of damage measure in connection with swap agreements,
securities contracts, forward contracts, commodity contracts,
repurchase agreements, or master netting agreements.''.
(b) Claims Arising From Rejection.--Section 502(g) of title 11,
United States Code, is amended--
(1) by inserting ``(1)'' after ``(g)''; and
(2) by adding at the end the following:
``(2) A claim for damages calculated in accordance with section 562
shall be allowed under subsection (a), (b), or (c), or disallowed under
subsection (d) or (e), as if such claim had arisen before the date of
the filing of the petition.''.
SEC. 911. SIPC STAY.
Section 5(b)(2) of the Securities Investor Protection Act of 1970
(15 U.S.C. 78eee(b)(2)) is amended by adding at the end the following
new subparagraph:
``(C) Exception from stay.--
``(i) Notwithstanding section 362 of title 11, United
States Code, neither the filing of an application under
subsection (a)(3) nor any order or decree obtained by SIPC
from the court shall operate as a stay of any contractual
rights of a creditor to liquidate, terminate, or accelerate
a securities contract, commodity contract, forward
contract, repurchase agreement, swap agreement, or master
netting agreement, as those terms are defined in sections
101, 741, and 761 of title 11, United States Code, to
offset or net termination values, payment amounts, or other
transfer obligations arising under or in connection with
one or more of such contracts or agreements, or to
foreclose on any cash collateral pledged by the debtor,
whether or not with respect to one or more of such
contracts or agreements.
``(ii) Notwithstanding clause (i), such application,
order, or decree may operate as a stay of the foreclosure
on, or disposition of, securities collateral pledged by the
debtor, whether or not with respect to one or more of such
contracts or agreements, securities sold by the debtor
under a repurchase agreement, or securities lent under a
securities lending agreement.
``(iii) As used in this subparagraph, the term
`contractual right' includes a right set forth in a rule or
bylaw of a national securities exchange, a national
securities association, or a securities clearing agency, a
right set forth in a bylaw of a clearing organization or
contract market or in a resolution of the governing board
thereof, and a right, whether or not in writing, arising
under common law, under law merchant, or by reason of
normal business practice.''.
TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.
(a) Reenactment.--
(1) In general.--Chapter 12 of title 11, United States Code, as
reenacted by section 149 of division C of the Omnibus Consolidated
and Emergency Supplemental Appropriations Act, 1999 (Public Law
105-277), and as in effect on June 30, 2005, is hereby reenacted.
(2) Effective date of reenactment.--Paragraph (1) shall take
effect on July 1, 2005.
(b) Amendments--Chapter 12 of title 11, United States Code, as
reenacted by subsection (a), is amended by this Act.
(c) Conforming Amendment.--Section 302 of the Bankruptcy Judges,
United States Trustees, and Family Farmer Bankruptcy Act of 1986 (28
U.S.C. 581 note) is amended by striking subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, as amended by
section 226, is amended by inserting ``101(18),'' after ``101(3),''
each place it appears.
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.
(a) Contents of Plan.--Section 1222(a)(2) of title 11, United
States Code, as amended by section 213, is amended to read as follows:
``(2) provide for the full payment, in deferred cash payments,
of all claims entitled to priority under section 507, unless--
``(A) the claim is a claim owed to a governmental unit that
arises as a result of the sale, transfer, exchange, or other
disposition of any farm asset used in the debtor's farming
operation, in which case the claim shall be treated as an
unsecured claim that is not entitled to priority under section
507, but the debt shall be treated in such manner only if the
debtor receives a discharge; or
``(B) the holder of a particular claim agrees to a
different treatment of that claim;''.
(b) Special Notice Provisions.--Section 1231(b) of title 11, United
States Code, as so designated by section 719, is amended by striking
``a State or local governmental unit'' and inserting ``any governmental
unit''.
(c) Effective Date; Application of Amendments.--This section and
the amendments made by this section shall take effect on the date of
the enactment of this Act and shall not apply with respect to cases
commenced under title 11 of the United States Code before such date.
SEC. 1004. DEFINITION OF FAMILY FARMER.
Section 101(18) of title 11, United States Code, is amended--
(1) in subparagraph (A)--
(A) by striking ``$1,500,000'' and inserting
``$3,237,000''; and
(B) by striking ``80'' and inserting ``50''; and
(2) in subparagraph (B)(ii)--
(A) by striking ``$1,500,000'' and inserting
``$3,237,000''; and
(B) by striking ``80'' and inserting ``50''.
SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND SPOUSE
RECEIVE OVER 50 PERCENT OF INCOME FROM FARMING OPERATION
IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is amended by
striking ``for the taxable year preceding the taxable year'' and
inserting the following:
``for--
``(i) the taxable year preceding; or
``(ii) each of the 2d and 3d taxable years preceding;
the taxable year''.
SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE INCOME.
(a) Confirmation of Plan.--Section 1225(b)(1) of title 11, United
States Code, is amended--
(1) in subparagraph (A) by striking ``or'' at the end;
(2) in subparagraph (B) by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(C) the value of the property to be distributed under the
plan in the 3-year period, or such longer period as the court may
approve under section 1222(c), beginning on the date that the first
distribution is due under the plan is not less than the debtor's
projected disposable income for such period.''.
(b) Modification of Plan.--Section 1229 of title 11, United States
Code, is amended by adding at the end the following:
``(d) A plan may not be modified under this section--
``(1) to increase the amount of any payment due before the plan
as modified becomes the plan;
``(2) by anyone except the debtor, based on an increase in the
debtor's disposable income, to increase the amount of payments to
unsecured creditors required for a particular month so that the
aggregate of such payments exceeds the debtor's disposable income
for such month; or
``(3) in the last year of the plan by anyone except the debtor,
to require payments that would leave the debtor with insufficient
funds to carry on the farming operation after the plan is
completed.''.
SEC. 1007. FAMILY FISHERMEN.
(a) Definitions.--Section 101 of title 11, United States Code, is
amended--
(1) by inserting after paragraph (7) the following:
``(7A) `commercial fishing operation' means--
``(A) the catching or harvesting of fish, shrimp, lobsters,
urchins, seaweed, shellfish, or other aquatic species or
products of such species; or
``(B) for purposes of section 109 and chapter 12,
aquaculture activities consisting of raising for market any
species or product described in subparagraph (A);
``(7B) `commercial fishing vessel' means a vessel used by a
family fisherman to carry out a commercial fishing operation;'';
and
(2) by inserting after paragraph (19) the following:
``(19A) `family fisherman' means--
``(A) an individual or individual and spouse engaged in a
commercial fishing operation--
``(i) whose aggregate debts do not exceed $1,500,000
and not less than 80 percent of whose aggregate
noncontingent, liquidated debts (excluding a debt for the
principal residence of such individual or such individual
and spouse, unless such debt arises out of a commercial
fishing operation), on the date the case is filed, arise
out of a commercial fishing operation owned or operated by
such individual or such individual and spouse; and
``(ii) who receive from such commercial fishing
operation more than 50 percent of such individual's or such
individual's and spouse's gross income for the taxable year
preceding the taxable year in which the case concerning
such individual or such individual and spouse was filed; or
``(B) a corporation or partnership--
``(i) in which more than 50 percent of the outstanding
stock or equity is held by--
``(I) 1 family that conducts the commercial fishing
operation; or
``(II) 1 family and the relatives of the members of
such family, and such family or such relatives conduct
the commercial fishing operation; and
``(ii)(I) more than 80 percent of the value of its
assets consists of assets related to the commercial fishing
operation;
``(II) its aggregate debts do not exceed $1,500,000 and
not less than 80 percent of its aggregate noncontingent,
liquidated debts (excluding a debt for 1 dwelling which is
owned by such corporation or partnership and which a
shareholder or partner maintains as a principal residence,
unless such debt arises out of a commercial fishing
operation), on the date the case is filed, arise out of a
commercial fishing operation owned or operated by such
corporation or such partnership; and
``(III) if such corporation issues stock, such stock is
not publicly traded;
``(19B) `family fisherman with regular annual income' means a
family fisherman whose annual income is sufficiently stable and
regular to enable such family fisherman to make payments under a
plan under chapter 12 of this title;''.
(b) Who May Be a Debtor.--Section 109(f) of title 11, United States
Code, is amended by inserting ``or family fisherman'' after ``family
farmer''.
(c) Chapter 12.--Chapter 12 of title 11, United States Code, is
amended--
(1) in the chapter heading, by inserting ``OR FISHERMAN'' after
``FAMILY FARMER'';
(2) in section 1203, by inserting ``or commercial fishing
operation'' after ``farm''; and
(3) in section 1206, by striking ``if the property is farmland
or farm equipment'' and inserting ``if the property is farmland,
farm equipment, or property used to carry out a commercial fishing
operation (including a commercial fishing vessel)''.
(d) Clerical Amendment.--In the table of chapters for title 11,
United States Code, the item relating to chapter 12, is amended to read
as follows:
``12. Adjustments of Debts of a Family Farmer or Family Fisherman
with Regular Annual Income.......................................1201''.
(e) Applicability.--Nothing in this section shall change, affect,
or amend the Fishery Conservation and Management Act of 1976 (16 U.S.C.
1801 et seq.).
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) Health Care Business Defined.--Section 101 of title 11, United
States Code, as amended by section 306, is amended--
(1) by redesignating paragraph (27A) as paragraph (27B); and
(2) by inserting after paragraph (27) the following:
``(27A) `health care business'--
``(A) means any public or private entity (without regard to
whether that entity is organized for profit or not for profit)
that is primarily engaged in offering to the general public
facilities and services for--
``(i) the diagnosis or treatment of injury, deformity,
or disease; and
``(ii) surgical, drug treatment, psychiatric, or
obstetric care; and
``(B) includes--
``(i) any--
``(I) general or specialized hospital;
``(II) ancillary ambulatory, emergency, or surgical
treatment facility;
``(III) hospice;
``(IV) home health agency; and
``(V) other health care institution that is similar
to an entity referred to in subclause (I), (II), (III),
or (IV); and
``(ii) any long-term care facility, including any--
``(I) skilled nursing facility;
``(II) intermediate care facility;
``(III) assisted living facility;
``(IV) home for the aged;
``(V) domiciliary care facility; and
``(VI) health care institution that is related to a
facility referred to in subclause (I), (II), (III),
(IV), or (V), if that institution is primarily engaged
in offering room, board, laundry, or personal
assistance with activities of daily living and
incidentals to activities of daily living;''.
(b) Patient and Patient Records Defined.--Section 101 of title 11,
United States Code, is amended by inserting after paragraph (40) the
following:
``(40A) `patient' means any individual who obtains or receives
services from a health care business;
``(40B) `patient records' means any written document relating
to a patient or a record recorded in a magnetic, optical, or other
form of electronic medium;''.
(c) Rule of Construction.--The amendments made by subsection (a) of
this section shall not affect the interpretation of section 109(b) of
title 11, United States Code.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) In General.--Subchapter III of chapter 3 of title 11, United
States Code, is amended by adding at the end the following:
``Sec. 351. Disposal of patient records
``If a health care business commences a case under chapter 7, 9, or
11, and the trustee does not have a sufficient amount of funds to pay
for the storage of patient records in the manner required under
applicable Federal or State law, the following requirements shall
apply:
``(1) The trustee shall--
``(A) promptly publish notice, in 1 or more appropriate
newspapers, that if patient records are not claimed by the
patient or an insurance provider (if applicable law permits the
insurance provider to make that claim) by the date that is 365
days after the date of that notification, the trustee will
destroy the patient records; and
``(B) during the first 180 days of the 365-day period
described in subparagraph (A), promptly attempt to notify
directly each patient that is the subject of the patient
records and appropriate insurance carrier concerning the
patient records by mailing to the most recent known address of
that patient, or a family member or contact person for that
patient, and to the appropriate insurance carrier an
appropriate notice regarding the claiming or disposing of
patient records.
``(2) If, after providing the notification under paragraph (1),
patient records are not claimed during the 365-day period described
under that paragraph, the trustee shall mail, by certified mail, at
the end of such 365-day period a written request to each
appropriate Federal agency to request permission from that agency
to deposit the patient records with that agency, except that no
Federal agency is required to accept patient records under this
paragraph.
``(3) If, following the 365-day period described in paragraph
(2) and after providing the notification under paragraph (1),
patient records are not claimed by a patient or insurance provider,
or request is not granted by a Federal agency to deposit such
records with that agency, the trustee shall destroy those records
by--
``(A) if the records are written, shredding or burning the
records; or
``(B) if the records are magnetic, optical, or other
electronic records, by otherwise destroying those records so
that those records cannot be retrieved.''.
(b) Clerical Amendment.--The table of sections for subchapter III
of chapter 3 of title 11, United States Code, is amended by adding at
the end the following:
``351. Disposal of patient records.''.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING A HEALTH
CARE BUSINESS AND OTHER ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, as amended by
section 445, is amended by adding at the end the following:
``(8) the actual, necessary costs and expenses of closing a
health care business incurred by a trustee or by a Federal agency
(as defined in section 551(1) of title 5) or a department or agency
of a State or political subdivision thereof, including any cost or
expense incurred--
``(A) in disposing of patient records in accordance with
section 351; or
``(B) in connection with transferring patients from the
health care business that is in the process of being closed to
another health care business; and''.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT ADVOCATE.
(a) Ombudsman To Act as Patient Advocate.--
(1) Appointment of ombudsman.--Title 11, United States Code, as
amended by section 232, is amended by inserting after section 332
the following:
``Sec. 333. Appointment of patient care ombudsman
``(a)(1) If the debtor in a case under chapter 7, 9, or 11 is a
health care business, the court shall order, not later than 30 days
after the commencement of the case, the appointment of an ombudsman to
monitor the quality of patient care and to represent the interests of
the patients of the health care business unless the court finds that
the appointment of such ombudsman is not necessary for the protection
of patients under the specific facts of the case.
``(2)(A) If the court orders the appointment of an ombudsman under
paragraph (1), the United States trustee shall appoint 1 disinterested
person (other than the United States trustee) to serve as such
ombudsman.
``(B) If the debtor is a health care business that provides long-
term care, then the United States trustee may appoint the State Long-
Term Care Ombudsman appointed under the Older Americans Act of 1965 for
the State in which the case is pending to serve as the ombudsman
required by paragraph (1).
``(C) If the United States trustee does not appoint a State Long-
Term Care Ombudsman under subparagraph (B), the court shall notify the
State Long-Term Care Ombudsman appointed under the Older Americans Act
of 1965 for the State in which the case is pending, of the name and
address of the person who is appointed under subparagraph (A).
``(b) An ombudsman appointed under subsection (a) shall--
``(1) monitor the quality of patient care provided to patients
of the debtor, to the extent necessary under the circumstances,
including interviewing patients and physicians;
``(2) not later than 60 days after the date of appointment, and
not less frequently than at 60-day intervals thereafter, report to
the court after notice to the parties in interest, at a hearing or
in writing, regarding the quality of patient care provided to
patients of the debtor; and
``(3) if such ombudsman determines that the quality of patient
care provided to patients of the debtor is declining significantly
or is otherwise being materially compromised, file with the court a
motion or a written report, with notice to the parties in interest
immediately upon making such determination.
``(c)(1) An ombudsman appointed under subsection (a) shall maintain
any information obtained by such ombudsman under this section that
relates to patients (including information relating to patient records)
as confidential information. Such ombudsman may not review confidential
patient records unless the court approves such review in advance and
imposes restrictions on such ombudsman to protect the confidentiality
of such records.
``(2) An ombudsman appointed under subsection (a)(2)(B) shall have
access to patient records consistent with authority of such ombudsman
under the Older Americans Act of 1965 and under non-Federal laws
governing the State Long-Term Care Ombudsman program.''.
(2) Clerical amendment.--The table of sections for subchapter
II of chapter 3 of title 11, United States Code, as amended by
section 232, is amended by adding at the end the following:
``333. Appointment of ombudsman.''.
(b) Compensation of Ombudsman.--Section 330(a)(1) of title 11,
United States Code, is amended--
(1) in the matter preceding subparagraph (A), by inserting ``an
ombudsman appointed under section 333, or'' before ``a professional
person''; and
(2) in subparagraph (A), by inserting ``ombudsman,'' before
``professional person''.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER PATIENTS.
(a) In General.--Section 704(a) of title 11, United States Code, as
amended by sections 102, 219, and 446, is amended by adding at the end
the following:
``(12) use all reasonable and best efforts to transfer patients
from a health care business that is in the process of being closed
to an appropriate health care business that--
``(A) is in the vicinity of the health care business that
is closing;
``(B) provides the patient with services that are
substantially similar to those provided by the health care
business that is in the process of being closed; and
``(C) maintains a reasonable quality of care.''.
(b) Conforming Amendment.--Section 1106(a)(1) of title 11, United
States Code, as amended by section 446, is amended by striking ``and
(11)'' and inserting ``(11), and (12)''.
SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION NOT SUBJECT TO
AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, is amended by
inserting after paragraph (27), as amended by sections 224, 303, 311,
401, 718, and 907, the following:
``(28) under subsection (a), of the exclusion by the Secretary
of Health and Human Services of the debtor from participation in
the medicare program or any other Federal health care program (as
defined in section 1128B(f) of the Social Security Act pursuant to
title XI or XVIII of such Act).''.
TITLE XII--TECHNICAL AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by this
Act, is further amended--
(1) by striking ``In this title--'' and inserting ``In this
title the following definitions shall apply:'';
(2) in each paragraph (other than paragraph (54A)), by
inserting ``The term'' after the paragraph designation;
(3) in paragraph (35)(B), by striking ``paragraphs (21B) and
(33)(A)'' and inserting ``paragraphs (23) and (35)'';
(4) in each of paragraphs (35A), (38), and (54A), by striking
``; and'' at the end and inserting a period;
(5) in paragraph (51B)--
(A) by inserting ``who is not a family farmer'' after
``debtor'' the first place it appears; and
(B) by striking ``thereto having aggregate'' and all that
follows through the end of the paragraph and inserting a
semicolon;
(6) by striking paragraph (54) and inserting the following:
``(54) The term `transfer' means--
``(A) the creation of a lien;
``(B) the retention of title as a security interest;
``(C) the foreclosure of a debtor's equity of redemption;
or
``(D) each mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of disposing of or
parting with--
``(i) property; or
``(ii) an interest in property;'';
(7) in paragraph (54A)--
(A) by striking ``the term'' and inserting ``The term'';
and
(B) by indenting the left margin of paragraph (54A) 2 ems
to the right; and
(8) in each of paragraphs (1) through (35), in each of
paragraphs (36), (37), (38A), (38B) and (39A), and in each of
paragraphs (40) through (55), by striking the semicolon at the end
and inserting a period.
SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104(b) of title 11, United States Code, as amended by this
Act, is further amended--
(1) by inserting ``101(19A),'' after ``101(18),'' each place it
appears;
(2) by inserting ``522(f)(3) and 522(f)(4),'' after ``522(d),''
each place it appears;
(3) by inserting ``541(b), 547(c)(9),'' after ``523(a)(2)(C),''
each place it appears;
(4) in paragraph (1), by striking ``and 1325(b)(3)'' and
inserting ``1322(d), 1325(b), and 1326(b)(3) of this title and
section 1409(b) of title 28''; and
(5) in paragraph (2), by striking ``and 1325(b)(3) of this
title'' and inserting ``1322(d), 1325(b), and 1326(b)(3) of this
title and section 1409(b) of title 28''.
SEC. 1203. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is amended by
striking ``922'' and all that follows through ``or'', and inserting
``922, 1201, or''.
SEC. 1204. TECHNICAL AMENDMENTS.
Title 11, United States Code, is amended--
(1) in section 109(b)(2), by striking ``subsection (c) or (d)
of''; and
(2) in section 552(b)(1), by striking ``product'' each place it
appears and inserting ``products''.
SEC. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE
BANKRUPTCY PETITIONS.
Section 110(j)(4) of title 11, United States Code, as so
redesignated by section 221, is amended by striking ``attorney's'' and
inserting ``attorneys'''.
SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.
Section 328(a) of title 11, United States Code, is amended by
inserting ``on a fixed or percentage fee basis,'' after ``hourly
basis,''.
SEC. 1207. EFFECT OF CONVERSION.
Section 348(f)(2) of title 11, United States Code, is amended by
inserting ``of the estate'' after ``property'' the first place it
appears.
SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.
Section 503(b)(4) of title 11, United States Code, is amended by
inserting ``subparagraph (A), (B), (C), (D), or (E) of'' before
``paragraph (3)''.
SEC. 1209. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by sections
215 and 314, is amended--
(1) by transferring paragraph (15), as added by section 304(e)
of Public Law 103-394 (108 Stat. 4133), so as to insert such
paragraph after subsection (a)(14A);
(2) in subsection (a)(9), by striking ``motor vehicle'' and
inserting ``motor vehicle, vessel, or aircraft''; and
(3) in subsection (e), by striking ``a insured'' and inserting
``an insured''.
SEC. 1210. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is amended by
striking ``section 523'' and all that follows through ``or that'' and
inserting ``section 523, 1228(a)(1), or 1328(a)(1), or that''.
SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by inserting ``student'' before ``grant''
the second place it appears; and
(2) in paragraph (2), by striking ``the program operated under
part B, D, or E of'' and inserting ``any program operated under''.
SEC. 1212. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States Code, is
amended by inserting ``365 or'' before ``542''.
SEC. 1213. PREFERENCES.
(a) In General.--Section 547 of title 11, United States Code, as
amended by section 201, is amended--
(1) in subsection (b), by striking ``subsection (c)'' and
inserting ``subsections (c) and (i)''; and
(2) by adding at the end the following:
``(i) If the trustee avoids under subsection (b) a transfer made
between 90 days and 1 year before the date of the filing of the
petition, by the debtor to an entity that is not an insider for the
benefit of a creditor that is an insider, such transfer shall be
considered to be avoided under this section only with respect to the
creditor that is an insider.''.
(b) Applicability.--The amendments made by this section shall apply
to any case that is pending or commenced on or after the date of
enactment of this Act.
SEC. 1214. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is amended--
(1) by inserting ``an interest in'' after ``transfer of'' each
place it appears;
(2) by striking ``such property'' and inserting ``such real
property''; and
(3) by striking ``the interest'' and inserting ``such
interest''.
SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by
striking ``1009,''.
SEC. 1216. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, is amended by
inserting ``1123(d),'' after ``1123(b),''.
SEC. 1217. ABANDONMENT OF RAILROAD LINE.
Section 1170(e)(1) of title 11, United States Code, is amended by
striking ``section 11347'' and inserting ``section 11326(a)''.
SEC. 1218. CONTENTS OF PLAN.
Section 1172(c)(1) of title 11, United States Code, is amended by
striking ``section 11347'' and inserting ``section 11326(a)''.
SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS.
Section 1334(d) of title 28, United States Code, is amended--
(1) by striking ``made under this subsection'' and inserting
``made under subsection (c)''; and
(2) by striking ``This subsection'' and inserting ``Subsection
(c) and this subsection''.
SEC. 1220. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.
Section 156(a) of title 18, United States Code, is amended--
(1) in the first undesignated paragraph--
(A) by inserting ``(1) the term'' before ```bankruptcy'';
and
(B) by striking the period at the end and inserting ``;
and''; and
(2) in the second undesignated paragraph--
(A) by inserting ``(2) the term'' before ```document''; and
(B) by striking ``this title'' and inserting ``title 11''.
SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.
(a) Sale of Property of Estate.--Section 363(d) of title 11, United
States Code, is amended by striking ``only'' and all that follows
through the end of the subsection and inserting ``only--
``(1) in accordance with applicable nonbankruptcy law that
governs the transfer of property by a corporation or trust that is
not a moneyed, business, or commercial corporation or trust; and
``(2) to the extent not inconsistent with any relief granted
under subsection (c), (d), (e), or (f) of section 362.''.
(b) Confirmation of Plan of Reorganization.--Section 1129(a) of
title 11, United States Code, as amended by sections 213 and 321, is
amended by adding at the end the following:
``(16) All transfers of property of the plan shall be made in
accordance with any applicable provisions of nonbankruptcy law that
govern the transfer of property by a corporation or trust that is
not a moneyed, business, or commercial corporation or trust.''.
(c) Transfer of Property.--Section 541 of title 11, United States
Code, as amended by section 225, is amended by adding at the end the
following:
``(f) Notwithstanding any other provision of this title, property
that is held by a debtor that is a corporation described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax
under section 501(a) of such Code may be transferred to an entity that
is not such a corporation, but only under the same conditions as would
apply if the debtor had not filed a case under this title.''.
(d) Applicability.--The amendments made by this section shall apply
to a case pending under title 11, United States Code, on the date of
enactment of this Act, or filed under that title on or after that date
of enactment, except that the court shall not confirm a plan under
chapter 11 of title 11, United States Code, without considering whether
this section would substantially affect the rights of a party in
interest who first acquired rights with respect to the debtor after the
date of the filing of the petition. The parties who may appear and be
heard in a proceeding under this section include the attorney general
of the State in which the debtor is incorporated, was formed, or does
business.
(e) Rule of Construction.--Nothing in this section shall be
construed to require the court in which a case under chapter 11 of
title 11, United States Code, is pending to remand or refer any
proceeding, issue, or controversy to any other court or to require the
approval of any other court for the transfer of property.
SEC. 1222. PROTECTION OF VALID PURCHASE MONEY SECURITY INTERESTS.
Section 547(c)(3)(B) of title 11, United States Code, is amended by
striking ``20'' and inserting ``30''.
SEC. 1223. BANKRUPTCY JUDGESHIPS.
(a) Short Title.--This section may be cited as the ``Bankruptcy
Judgeship Act of 2005''.
(b) Temporary Judgeships.--
(1) Appointments.--The following bankruptcy judges shall be
appointed in the manner prescribed in section 152(a)(1) of title
28, United States Code, for the appointment of bankruptcy judges
provided for in section 152(a)(2) of such title:
(A) One additional bankruptcy judge for the eastern
district of California.
(B) Three additional bankruptcy judges for the central
district of California.
(C) Four additional bankruptcy judges for the district of
Delaware.
(D) Two additional bankruptcy judges for the southern
district of Florida.
(E) One additional bankruptcy judge for the southern
district of Georgia.
(F) Three additional bankruptcy judges for the district of
Maryland.
(G) One additional bankruptcy judge for the eastern
district of Michigan.
(H) One additional bankruptcy judge for the southern
district of Mississippi.
(I) One additional bankruptcy judge for the district of New
Jersey.
(J) One additional bankruptcy judge for the eastern
district of New York.
(K) One additional bankruptcy judge for the northern
district of New York.
(L) One additional bankruptcy judge for the southern
district of New York.
(M) One additional bankruptcy judge for the eastern
district of North Carolina.
(N) One additional bankruptcy judge for the eastern
district of Pennsylvania.
(O) One additional bankruptcy judge for the middle district
of Pennsylvania.
(P) One additional bankruptcy judge for the district of
Puerto Rico.
(Q) One additional bankruptcy judge for the western
district of Tennessee.
(R) One additional bankruptcy judge for the eastern
district of Virginia.
(S) One additional bankruptcy judge for the district of
South Carolina.
(T) One additional bankruptcy judge for the district of
Nevada.
(2) Vacancies.--
(A) Districts with single appointments.--Except as provided
in subparagraphs (B), (C), (D), and (E), the first vacancy
occurring in the office of bankruptcy judge in each of the
judicial districts set forth in paragraph (1)--
(i) occurring 5 years or more after the appointment
date of the bankruptcy judge appointed under paragraph (1)
to such office; and
(ii) resulting from the death, retirement, resignation,
or removal of a bankruptcy judge;
shall not be filled.
(B) Central district of california.--The 1st, 2d, and 3d
vacancies in the office of bankruptcy judge in the central
district of California--
(i) occurring 5 years or more after the respective 1st,
2d, and 3d appointment dates of the bankruptcy judges
appointed under paragraph (1)(B); and
(ii) resulting from the death, retirement, resignation,
or removal of a bankruptcy judge;
shall not be filled.
(C) District of delaware.--The 1st, 2d, 3d, and 4th
vacancies in the office of bankruptcy judge in the district of
Delaware--
(i) occurring 5 years or more after the respective 1st,
2d, 3d, and 4th appointment dates of the bankruptcy judges
appointed under paragraph (1)(F); and
(ii) resulting from the death, retirement, resignation,
or removal of a bankruptcy judge;
shall not be filled.
(D) Southern district of florida.--The 1st and 2d vacancies
in the office of bankruptcy judge in the southern district of
Florida--
(i) occurring 5 years or more after the respective 1st
and 2d appointment dates of the bankruptcy judges appointed
under paragraph (1)(D); and
(ii) resulting from the death, retirement, resignation,
or removal of a bankruptcy judge;
shall not be filled.
(E) District of maryland.--The 1st, 2d, and 3d vacancies in
the office of bankruptcy judge in the district of Maryland--
(i) occurring 5 years or more after the respective 1st,
2d, and 3d appointment dates of the bankruptcy judges
appointed under paragraph (1)(F); and
(ii) resulting from the death, retirement, resignation,
or removal of a bankruptcy judge;
shall not be filled.
(c) Extensions.--
(1) In general.--The temporary office of bankruptcy judges
authorized for the northern district of Alabama, the district of
Delaware, the district of Puerto Rico, and the eastern district of
Tennessee under paragraphs (1), (3), (7), and (9) of section 3(a)
of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are
extended until the first vacancy occurring in the office of a
bankruptcy judge in the applicable district resulting from the
death, retirement, resignation, or removal of a bankruptcy judge
and occurring 5 years after the date of the enactment of this Act.
(2) Applicability of other provisions.--All other provisions of
section 3 of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152
note) remain applicable to the temporary office of bankruptcy
judges referred to in this subsection.
(d) Technical Amendments.--Section 152(a) of title 28, United
States Code, is amended--
(1) in paragraph (1), by striking the first sentence and
inserting the following: ``Each bankruptcy judge to be appointed
for a judicial district, as provided in paragraph (2), shall be
appointed by the court of appeals of the United States for the
circuit in which such district is located.''; and
(2) in paragraph (2)--
(A) in the item relating to the middle district of Georgia,
by striking ``2'' and inserting ``3''; and
(B) in the collective item relating to the middle and
southern districts of Georgia, by striking ``Middle and
Southern . . . . . . 1''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 1224. COMPENSATING TRUSTEES.
Section 1326 of title 11, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``and'';
(B) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(3) if a chapter 7 trustee has been allowed compensation due
to the conversion or dismissal of the debtor's prior case pursuant
to section 707(b), and some portion of that compensation remains
unpaid in a case converted to this chapter or in the case dismissed
under section 707(b) and refiled under this chapter, the amount of
any such unpaid compensation, which shall be paid monthly--
``(A) by prorating such amount over the remaining duration
of the plan; and
``(B) by monthly payments not to exceed the greater of--
``(i) $25; or
``(ii) the amount payable to unsecured nonpriority
creditors, as provided by the plan, multiplied by 5
percent, and the result divided by the number of months in
the plan.''; and
(2) by adding at the end the following:
``(d) Notwithstanding any other provision of this title--
``(1) compensation referred to in subsection (b)(3) is payable
and may be collected by the trustee under that paragraph, even if
such amount has been discharged in a prior case under this title;
and
``(2) such compensation is payable in a case under this chapter
only to the extent permitted by subsection (b)(3).''.
SEC. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED STATES CODE.
Section 362(b)(18) of title 11, United States Code, is amended to
read as follows:
``(18) under subsection (a) of the creation or perfection of a
statutory lien for an ad valorem property tax, or a special tax or
special assessment on real property whether or not ad valorem,
imposed by a governmental unit, if such tax or assessment comes due
after the date of the filing of the petition;''.
SEC. 1226. JUDICIAL EDUCATION.
The Director of the Federal Judicial Center, in consultation with
the Director of the Executive Office for United States Trustees, shall
develop materials and conduct such training as may be useful to courts
in implementing this Act and the amendments made by this Act, including
the requirements relating to the means test under section 707(b), and
reaffirmation agreements under section 524, of title 11 of the United
States Code, as amended by this Act.
SEC. 1227. RECLAMATION.
(a) Rights and Powers of the Trustee.--Section 546(c) of title 11,
United States Code, is amended to read as follows:
``(c)(1) Except as provided in subsection (d) of this section and
in section 507(c), and subject to the prior rights of a holder of a
security interest in such goods or the proceeds thereof, the rights and
powers of the trustee under sections 544(a), 545, 547, and 549 are
subject to the right of a seller of goods that has sold goods to the
debtor, in the ordinary course of such seller's business, to reclaim
such goods if the debtor has received such goods while insolvent,
within 45 days before the date of the commencement of a case under this
title, but such seller may not reclaim such goods unless such seller
demands in writing reclamation of such goods--
``(A) not later than 45 days after the date of receipt of such
goods by the debtor; or
``(B) not later than 20 days after the date of commencement of
the case, if the 45-day period expires after the commencement of
the case.
``(2) If a seller of goods fails to provide notice in the manner
described in paragraph (1), the seller still may assert the rights
contained in section 503(b)(9).''.
(b) Administrative Expenses.--Section 503(b) of title 11, United
States Code, as amended by sections 445 and 1103, is amended by adding
at the end the following:
``(9) the value of any goods received by the debtor within 20
days before the date of commencement of a case under this title in
which the goods have been sold to the debtor in the ordinary course
of such debtor's business.''.
SEC. 1228. PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT.
(a) Chapter 7 Cases.--The court shall not grant a discharge in the
case of an individual who is a debtor in a case under chapter 7 of
title 11, United States Code, unless requested tax documents have been
provided to the court.
(b) Chapter 11 and Chapter 13 Cases.--The court shall not confirm a
plan of reorganization in the case of an individual under chapter 11 or
13 of title 11, United States Code, unless requested tax documents have
been filed with the court.
(c) Document Retention.--The court shall destroy documents
submitted in support of a bankruptcy claim not sooner than 3 years
after the date of the conclusion of a case filed by an individual under
chapter 7, 11, or 13 of title 11, United States Code. In the event of a
pending audit or enforcement action, the court may extend the time for
destruction of such requested tax documents.
SEC. 1229. ENCOURAGING CREDITWORTHINESS.
(a) Sense of the Congress.--It is the sense of the Congress that--
(1) certain lenders may sometimes offer credit to consumers
indiscriminately, without taking steps to ensure that consumers are
capable of repaying the resulting debt, and in a manner which may
encourage certain consumers to accumulate additional debt; and
(2) resulting consumer debt may increasingly be a major
contributing factor to consumer insolvency.
(b) Study Required.--The Board of Governors of the Federal Reserve
System (hereafter in this section referred to as the ``Board'') shall
conduct a study of--
(1) consumer credit industry practices of soliciting and
extending credit--
(A) indiscriminately;
(B) without taking steps to ensure that consumers are
capable of repaying the resulting debt; and
(C) in a manner that encourages consumers to accumulate
additional debt; and
(2) the effects of such practices on consumer debt and
insolvency.
(c) Report and Regulations.--Not later than 12 months after the
date of enactment of this Act, the Board--
(1) shall make public a report on its findings with respect to
the indiscriminate solicitation and extension of credit by the
credit industry;
(2) may issue regulations that would require additional
disclosures to consumers; and
(3) may take any other actions, consistent with its existing
statutory authority, that the Board finds necessary to ensure
responsible industrywide practices and to prevent resulting
consumer debt and insolvency.
SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMPTION.
Section 541(b) of title 11, United States Code, as amended by
sections 225 and 323, is amended by adding after paragraph (7), as
added by section 323, the following:
``(8) subject to subchapter III of chapter 5, any interest of
the debtor in property where the debtor pledged or sold tangible
personal property (other than securities or written or printed
evidences of indebtedness or title) as collateral for a loan or
advance of money given by a person licensed under law to make such
loans or advances, where--
``(A) the tangible personal property is in the possession
of the pledgee or transferee;
``(B) the debtor has no obligation to repay the money,
redeem the collateral, or buy back the property at a stipulated
price; and
``(C) neither the debtor nor the trustee have exercised any
right to redeem provided under the contract or State law, in a
timely manner as provided under State law and section 108(b);
or''.
SEC. 1231. TRUSTEES.
(a) Suspension and Termination of Panel Trustees and Standing
Trustees.--Section 586(d) of title 28, United States Code, is amended--
(1) by inserting ``(1)'' after ``(d)''; and
(2) by adding at the end the following:
``(2) A trustee whose appointment under subsection (a)(1) or under
subsection (b) is terminated or who ceases to be assigned to cases
filed under title 11, United States Code, may obtain judicial review of
the final agency decision by commencing an action in the district court
of the United States for the district for which the panel to which the
trustee is appointed under subsection (a)(1), or in the district court
of the United States for the district in which the trustee is appointed
under subsection (b) resides, after first exhausting all available
administrative remedies, which if the trustee so elects, shall also
include an administrative hearing on the record. Unless the trustee
elects to have an administrative hearing on the record, the trustee
shall be deemed to have exhausted all administrative remedies for
purposes of this paragraph if the agency fails to make a final agency
decision within 90 days after the trustee requests administrative
remedies. The Attorney General shall prescribe procedures to implement
this paragraph. The decision of the agency shall be affirmed by the
district court unless it is unreasonable and without cause based on the
administrative record before the agency.''.
(b) Expenses of Standing Trustees.--Section 586(e) of title 28,
United States Code, is amended by adding at the end the following:
``(3) After first exhausting all available administrative remedies,
an individual appointed under subsection (b) may obtain judicial review
of final agency action to deny a claim of actual, necessary expenses
under this subsection by commencing an action in the district court of
the United States for the district where the individual resides. The
decision of the agency shall be affirmed by the district court unless
it is unreasonable and without cause based upon the administrative
record before the agency.
``(4) The Attorney General shall prescribe procedures to implement
this subsection.''.
SEC. 1232. BANKRUPTCY FORMS.
Section 2075 of title 28, United States Code, is amended by adding
at the end the following:
``The bankruptcy rules promulgated under this section shall
prescribe a form for the statement required under section 707(b)(2)(C)
of title 11 and may provide general rules on the content of such
statement.''.
SEC. 1233. DIRECT APPEALS OF BANKRUPTCY MATTERS TO COURTS OF APPEALS.
(a) Appeals.--Section 158 of title 28, United States Code, is
amended--
(1) in subsection (c)(1), by striking ``Subject to subsection
(b),'' and inserting ``Subject to subsections (b) and (d)(2),'';
and
(2) in subsection (d)--
(A) by inserting ``(1)'' after ``(d)''; and
(B) by adding at the end the following:
``(2)(A) The appropriate court of appeals shall have jurisdiction
of appeals described in the first sentence of subsection (a) if the
bankruptcy court, the district court, or the bankruptcy appellate panel
involved, acting on its own motion or on the request of a party to the
judgment, order, or decree described in such first sentence, or all the
appellants and appellees (if any) acting jointly, certify that--
``(i) the judgment, order, or decree involves a question of law
as to which there is no controlling decision of the court of
appeals for the circuit or of the Supreme Court of the United
States, or involves a matter of public importance;
``(ii) the judgment, order, or decree involves a question of
law requiring resolution of conflicting decisions; or
``(iii) an immediate appeal from the judgment, order, or decree
may materially advance the progress of the case or proceeding in
which the appeal is taken;
and if the court of appeals authorizes the direct appeal of the
judgment, order, or decree.
``(B) If the bankruptcy court, the district court, or the
bankruptcy appellate panel--
``(i) on its own motion or on the request of a party,
determines that a circumstance specified in clause (i), (ii), or
(iii) of subparagraph (A) exists; or
``(ii) receives a request made by a majority of the appellants
and a majority of appellees (if any) to make the certification
described in subparagraph (A);
then the bankruptcy court, the district court, or the bankruptcy
appellate panel shall make the certification described in subparagraph
(A).
``(C) The parties may supplement the certification with a short
statement of the basis for the certification.
``(D) An appeal under this paragraph does not stay any proceeding
of the bankruptcy court, the district court, or the bankruptcy
appellate panel from which the appeal is taken, unless the respective
bankruptcy court, district court, or bankruptcy appellate panel, or the
court of appeals in which the appeal in pending, issues a stay of such
proceeding pending the appeal.
``(E) Any request under subparagraph (B) for certification shall be
made not later than 60 days after the entry of the judgment, order, or
decree.''.
(b) Procedural Rules.--
(1) Temporary application.--A provision of this subsection
shall apply to appeals under section 158(d)(2) of title 28, United
States Code, until a rule of practice and procedure relating to
such provision and such appeals is promulgated or amended under
chapter 131 of such title.
(2) Certification.--A district court, a bankruptcy court, or a
bankruptcy appellate panel may make a certification under section
158(d)(2) of title 28, United States Code, only with respect to
matters pending in the respective bankruptcy court, district court,
or bankruptcy appellate panel.
(3) Procedure.--Subject to any other provision of this
subsection, an appeal authorized by the court of appeals under
section 158(d)(2)(A) of title 28, United States Code, shall be
taken in the manner prescribed in subdivisions (a)(1), (b), (c),
and (d) of rule 5 of the Federal Rules of Appellate Procedure. For
purposes of subdivision (a)(1) of rule 5--
(A) a reference in such subdivision to a district court
shall be deemed to include a reference to a bankruptcy court
and a bankruptcy appellate panel, as appropriate; and
(B) a reference in such subdivision to the parties
requesting permission to appeal to be served with the petition
shall be deemed to include a reference to the parties to the
judgment, order, or decree from which the appeal is taken.
(4) Filing of petition with attachment.--A petition requesting
permission to appeal, that is based on a certification made under
subparagraph (A) or (B) of section 158(d)(2) shall--
(A) be filed with the circuit clerk not later than 10 days
after the certification is entered on the docket of the
bankruptcy court, the district court, or the bankruptcy
appellate panel from which the appeal is taken; and
(B) have attached a copy of such certification.
(5) References in rule 5.--For purposes of rule 5 of the
Federal Rules of Appellate Procedure--
(A) a reference in such rule to a district court shall be
deemed to include a reference to a bankruptcy court and to a
bankruptcy appellate panel; and
(B) a reference in such rule to a district clerk shall be
deemed to include a reference to a clerk of a bankruptcy court
and to a clerk of a bankruptcy appellate panel.
(6) Application of rules.--The Federal Rules of Appellate
Procedure shall apply in the courts of appeals with respect to
appeals authorized under section 158(d)(2)(A), to the extent
relevant and as if such appeals were taken from final judgments,
orders, or decrees of the district courts or bankruptcy appellate
panels exercising appellate jurisdiction under subsection (a) or
(b) of section 158 of title 28, United States Code.
SEC. 1234. INVOLUNTARY CASES.
(a) Amendments.--Section 303 of title 11, United States Code, is
amended--
(1) in subsection (b)(1), by--
(A) inserting ``as to liability or amount'' after ``bona
fide dispute''; and
(B) striking ``if such claims'' and inserting ``if such
noncontingent, undisputed claims''; and
(2) in subsection (h)(1), by inserting ``as to liability or
amount'' before the semicolon at the end.
(b) Effective Date; Application of Amendments.--This section and
the amendments made by this section shall take effect on the date of
the enactment of this Act and shall apply with respect to cases
commenced under title 11 of the United States Code before, on, and
after such date.
SEC. 1235. FEDERAL ELECTION LAW FINES AND PENALTIES AS NONDISCHARGEABLE
DEBT.
Section 523(a) of title 11, United States Code, as amended by
section 314, is amended by inserting after paragraph (14A) the
following:
``(14B) incurred to pay fines or penalties imposed under
Federal election law;''.
TITLE XIII--CONSUMER CREDIT DISCLOSURE
SEC. 1301. ENHANCED DISCLOSURES UNDER AN OPEN END CREDIT PLAN.
(a) Minimum Payment Disclosures.--Section 127(b) of the Truth in
Lending Act (15 U.S.C. 1637(b)) is amended by adding at the end the
following:
``(11)(A) In the case of an open end credit plan that requires
a minimum monthly payment of not more than 4 percent of the balance
on which finance charges are accruing, the following statement,
located on the front of the billing statement, disclosed clearly
and conspicuously: `Minimum Payment Warning: Making only the
minimum payment will increase the interest you pay and the time it
takes to repay your balance. For example, making only the typical
2% minimum monthly payment on a balance of $1,000 at an interest
rate of 17% would take 88 months to repay the balance in full. For
an estimate of the time it would take to repay your balance, making
only minimum payments, call this toll-free number: ______.' (the
blank space to be filled in by the creditor).
``(B) In the case of an open end credit plan that requires a
minimum monthly payment of more than 4 percent of the balance on
which finance charges are accruing, the following statement, in a
prominent location on the front of the billing statement, disclosed
clearly and conspicuously: `Minimum Payment Warning: Making only
the required minimum payment will increase the interest you pay and
the time it takes to repay your balance. Making a typical 5%
minimum monthly payment on a balance of $300 at an interest rate of
17% would take 24 months to repay the balance in full. For an
estimate of the time it would take to repay your balance, making
only minimum monthly payments, call this toll-free number: ______.'
(the blank space to be filled in by the creditor).
``(C) Notwithstanding subparagraphs (A) and (B), in the case of
a creditor with respect to which compliance with this title is
enforced by the Federal Trade Commission, the following statement,
in a prominent location on the front of the billing statement,
disclosed clearly and conspicuously: `Minimum Payment Warning:
Making only the required minimum payment will increase the interest
you pay and the time it takes to repay your balance. For example,
making only the typical 5% minimum monthly payment on a balance of
$300 at an interest rate of 17% would take 24 months to repay the
balance in full. For an estimate of the time it would take to repay
your balance, making only minimum monthly payments, call the
Federal Trade Commission at this toll-free number: ______.' (the
blank space to be filled in by the creditor). A creditor who is
subject to this subparagraph shall not be subject to subparagraph
(A) or (B).
``(D) Notwithstanding subparagraph (A), (B), or (C), in
complying with any such subparagraph, a creditor may substitute an
example based on an interest rate that is greater than 17 percent.
Any creditor that is subject to subparagraph (B) may elect to
provide the disclosure required under subparagraph (A) in lieu of
the disclosure required under subparagraph (B).
``(E) The Board shall, by rule, periodically recalculate, as
necessary, the interest rate and repayment period under
subparagraphs (A), (B), and (C).
``(F)(i) The toll-free telephone number disclosed by a creditor
or the Federal Trade Commission under subparagraph (A), (B), or
(G), as appropriate, may be a toll-free telephone number
established and maintained by the creditor or the Federal Trade
Commission, as appropriate, or may be a toll-free telephone number
established and maintained by a third party for use by the creditor
or multiple creditors or the Federal Trade Commission, as
appropriate. The toll-free telephone number may connect consumers
to an automated device through which consumers may obtain
information described in subparagraph (A), (B), or (C), by
inputting information using a touch-tone telephone or similar
device, if consumers whose telephones are not equipped to use such
automated device are provided the opportunity to be connected to an
individual from whom the information described in subparagraph (A),
(B), or (C), as applicable, may be obtained. A person that receives
a request for information described in subparagraph (A), (B), or
(C) from an obligor through the toll-free telephone number
disclosed under subparagraph (A), (B), or (C), as applicable, shall
disclose in response to such request only the information set forth
in the table promulgated by the Board under subparagraph (H)(i).
``(ii)(I) The Board shall establish and maintain for a period
not to exceed 24 months following the effective date of the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a
toll-free telephone number, or provide a toll-free telephone number
established and maintained by a third party, for use by creditors
that are depository institutions (as defined in section 3 of the
Federal Deposit Insurance Act), including a Federal credit union or
State credit union (as defined in section 101 of the Federal Credit
Union Act), with total assets not exceeding $250,000,000. The toll-
free telephone number may connect consumers to an automated device
through which consumers may obtain information described in
subparagraph (A) or (B), as applicable, by inputting information
using a touch-tone telephone or similar device, if consumers whose
telephones are not equipped to use such automated device are
provided the opportunity to be connected to an individual from whom
the information described in subparagraph (A) or (B), as
applicable, may be obtained. A person that receives a request for
information described in subparagraph (A) or (B) from an obligor
through the toll-free telephone number disclosed under subparagraph
(A) or (B), as applicable, shall disclose in response to such
request only the information set forth in the table promulgated by
the Board under subparagraph (H)(i). The dollar amount contained in
this subclause shall be adjusted according to an indexing mechanism
established by the Board.
``(II) Not later than 6 months prior to the expiration of the
24-month period referenced in subclause (I), the Board shall submit
to the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives a report on the program described in subclause (I).
``(G) The Federal Trade Commission shall establish and maintain
a toll-free number for the purpose of providing to consumers the
information required to be disclosed under subparagraph (C).
``(H) The Board shall--
``(i) establish a detailed table illustrating the
approximate number of months that it would take to repay an
outstanding balance if a consumer pays only the required
minimum monthly payments and if no other advances are made,
which table shall clearly present standardized information to
be used to disclose the information required to be disclosed
under subparagraph (A), (B), or (C), as applicable;
``(ii) establish the table required under clause (i) by
assuming--
``(I) a significant number of different annual
percentage rates;
``(II) a significant number of different account
balances;
``(III) a significant number of different minimum
payment amounts; and
``(IV) that only minimum monthly payments are made and
no additional extensions of credit are obtained; and
``(iii) promulgate regulations that provide instructional
guidance regarding the manner in which the information
contained in the table established under clause (i) should be
used in responding to the request of an obligor for any
information required to be disclosed under subparagraph (A),
(B), or (C).
``(I) The disclosure requirements of this paragraph do not
apply to any charge card account, the primary purpose of which is
to require payment of charges in full each month.
``(J) A creditor that maintains a toll-free telephone number
for the purpose of providing customers with the actual number of
months that it will take to repay the customer's outstanding
balance is not subject to the requirements of subparagraph (A) or
(B).
``(K) A creditor that maintains a toll-free telephone number
for the purpose of providing customers with the actual number of
months that it will take to repay an outstanding balance shall
include the following statement on each billing statement: `Making
only the minimum payment will increase the interest you pay and the
time it takes to repay your balance. For more information, call
this toll-free number: ____.' (the blank space to be filled in by
the creditor).''.
(b) Regulatory Implementation.--
(1) In general.--The Board of Governors of the Federal Reserve
System (hereafter in this title referred to as the ``Board'') shall
promulgate regulations implementing the requirements of section
127(b)(11) of the Truth in Lending Act, as added by subsection (a)
of this section.
(2) Effective date.--Section 127(b)(11) of the Truth in Lending
Act, as added by subsection (a) of this section, and the
regulations issued under paragraph (1) of this subsection shall not
take effect until the later of--
(A) 18 months after the date of enactment of this Act; or
(B) 12 months after the publication of such final
regulations by the Board.
(c) Study of Financial Disclosures.--
(1) In general.--The Board may conduct a study to determine the
types of information available to potential borrowers from consumer
credit lending institutions regarding factors qualifying potential
borrowers for credit, repayment requirements, and the consequences
of default.
(2) Factors for consideration.--In conducting a study under
paragraph (1), the Board should, in consultation with the other
Federal banking agencies (as defined in section 3 of the Federal
Deposit Insurance Act), the National Credit Union Administration,
and the Federal Trade Commission, consider the extent to which--
(A) consumers, in establishing new credit arrangements, are
aware of their existing payment obligations, the need to
consider those obligations in deciding to take on new credit,
and how taking on excessive credit can result in financial
difficulty;
(B) minimum periodic payment features offered in connection
with open end credit plans impact consumer default rates;
(C) consumers make only the required minimum payment under
open end credit plans;
(D) consumers are aware that making only required minimum
payments will increase the cost and repayment period of an open
end credit obligation; and
(E) the availability of low minimum payment options is a
cause of consumers experiencing financial difficulty.
(3) Report to congress.--Findings of the Board in connection
with any study conducted under this subsection shall be submitted
to Congress. Such report shall also include recommendations for
legislative initiatives, if any, of the Board, based on its
findings.
SEC. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A
DWELLING.
(a) Open End Credit Extensions.--
(1) Credit applications.--Section 127A(a)(13) of the Truth in
Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
(A) by striking ``consultation of tax adviser.--A statement
that the'' and inserting the following: ``tax deductibility.--A
statement that--
``(A) the''; and
(B) by striking the period at the end and inserting the
following: ``; and
``(B) in any case in which the extension of credit exceeds
the fair market value (as defined under the Internal Revenue
Code of 1986) of the dwelling, the interest on the portion of
the credit extension that is greater than the fair market value
of the dwelling is not tax deductible for Federal income tax
purposes.''.
(2) Credit advertisements.--Section 147(b) of the Truth in
Lending Act (15 U.S.C. 1665b(b)) is amended--
(A) by striking ``If any'' and inserting the following:
``(1) In general.--If any''; and
(B) by adding at the end the following:
``(2) Credit in excess of fair market value.--Each
advertisement described in subsection (a) that relates to an
extension of credit that may exceed the fair market value of the
dwelling, and which advertisement is disseminated in paper form to
the public or through the Internet, as opposed to by radio or
television, shall include a clear and conspicuous statement that--
``(A) the interest on the portion of the credit extension
that is greater than the fair market value of the dwelling is
not tax deductible for Federal income tax purposes; and
``(B) the consumer should consult a tax adviser for further
information regarding the deductibility of interest and
charges.''.
(b) Non-Open End Credit Extensions.--
(1) Credit applications.--Section 128 of the Truth in Lending
Act (15 U.S.C. 1638) is amended--
(A) in subsection (a), by adding at the end the following:
``(15) In the case of a consumer credit transaction that is
secured by the principal dwelling of the consumer, in which the
extension of credit may exceed the fair market value of the
dwelling, a clear and conspicuous statement that--
``(A) the interest on the portion of the credit extension
that is greater than the fair market value of the dwelling is
not tax deductible for Federal income tax purposes; and
``(B) the consumer should consult a tax adviser for further
information regarding the deductibility of interest and
charges.''; and
(B) in subsection (b), by adding at the end the following:
``(3) In the case of a credit transaction described in paragraph
(15) of subsection (a), disclosures required by that paragraph shall be
made to the consumer at the time of application for such extension of
credit.''.
(2) Credit advertisements.--Section 144 of the Truth in Lending
Act (15 U.S.C. 1664) is amended by adding at the end the following:
``(e) Each advertisement to which this section applies that relates
to a consumer credit transaction that is secured by the principal
dwelling of a consumer in which the extension of credit may exceed the
fair market value of the dwelling, and which advertisement is
disseminated in paper form to the public or through the Internet, as
opposed to by radio or television, shall clearly and conspicuously
state that--
``(1) the interest on the portion of the credit extension that
is greater than the fair market value of the dwelling is not tax
deductible for Federal income tax purposes; and
``(2) the consumer should consult a tax adviser for further
information regarding the deductibility of interest and charges.''.
(c) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the amendments made by this section.
(2) Effective date.--Regulations issued under paragraph (1)
shall not take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1303. DISCLOSURES RELATED TO ``INTRODUCTORY RATES''.
(a) Introductory Rate Disclosures.--Section 127(c) of the Truth in
Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the
following:
``(6) Additional notice concerning `introductory rates'.--
``(A) In general.--Except as provided in subparagraph (B),
an application or solicitation to open a credit card account
and all promotional materials accompanying such application or
solicitation for which a disclosure is required under paragraph
(1), and that offers a temporary annual percentage rate of
interest, shall--
``(i) use the term `introductory' in immediate
proximity to each listing of the temporary annual
percentage rate applicable to such account, which term
shall appear clearly and conspicuously;
``(ii) if the annual percentage rate of interest that
will apply after the end of the temporary rate period will
be a fixed rate, state in a clear and conspicuous manner in
a prominent location closely proximate to the first listing
of the temporary annual percentage rate (other than a
listing of the temporary annual percentage rate in the
tabular format described in section 122(c)), the time
period in which the introductory period will end and the
annual percentage rate that will apply after the end of the
introductory period; and
``(iii) if the annual percentage rate that will apply
after the end of the temporary rate period will vary in
accordance with an index, state in a clear and conspicuous
manner in a prominent location closely proximate to the
first listing of the temporary annual percentage rate
(other than a listing in the tabular format prescribed by
section 122(c)), the time period in which the introductory
period will end and the rate that will apply after that,
based on an annual percentage rate that was in effect
within 60 days before the date of mailing the application
or solicitation.
``(B) Exception.--Clauses (ii) and (iii) of subparagraph
(A) do not apply with respect to any listing of a temporary
annual percentage rate on an envelope or other enclosure in
which an application or solicitation to open a credit card
account is mailed.
``(C) Conditions for introductory rates.--An application or
solicitation to open a credit card account for which a
disclosure is required under paragraph (1), and that offers a
temporary annual percentage rate of interest shall, if that
rate of interest is revocable under any circumstance or upon
any event, clearly and conspicuously disclose, in a prominent
manner on or with such application or solicitation--
``(i) a general description of the circumstances that
may result in the revocation of the temporary annual
percentage rate; and
``(ii) if the annual percentage rate that will apply
upon the revocation of the temporary annual percentage
rate--
``(I) will be a fixed rate, the annual percentage
rate that will apply upon the revocation of the
temporary annual percentage rate; or
``(II) will vary in accordance with an index, the
rate that will apply after the temporary rate, based on
an annual percentage rate that was in effect within 60
days before the date of mailing the application or
solicitation.
``(D) Definitions.--In this paragraph--
``(i) the terms `temporary annual percentage rate of
interest' and `temporary annual percentage rate' mean any
rate of interest applicable to a credit card account for an
introductory period of less than 1 year, if that rate is
less than an annual percentage rate that was in effect
within 60 days before the date of mailing the application
or solicitation; and
``(ii) the term `introductory period' means the maximum
time period for which the temporary annual percentage rate
may be applicable.
``(E) Relation to other disclosure requirements.--Nothing
in this paragraph may be construed to supersede subsection (a)
of section 122, or any disclosure required by paragraph (1) or
any other provision of this subsection.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(c)(6) of the Truth in
Lending Act, as added by this section.
(2) Effective date.--Section 127(c)(6) of the Truth in Lending
Act, as added by this section, and regulations issued under
paragraph (1) of this subsection shall not take effect until the
later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.
(a) Internet-Based Solicitations.--Section 127(c) of the Truth in
Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the
following:
``(7) Internet-based solicitations.--
``(A) In general.--In any solicitation to open a credit
card account for any person under an open end consumer credit
plan using the Internet or other interactive computer service,
the person making the solicitation shall clearly and
conspicuously disclose--
``(i) the information described in subparagraphs (A)
and (B) of paragraph (1); and
``(ii) the information described in paragraph (6).
``(B) Form of disclosure.--The disclosures required by
subparagraph (A) shall be--
``(i) readily accessible to consumers in close
proximity to the solicitation to open a credit card
account; and
``(ii) updated regularly to reflect the current
policies, terms, and fee amounts applicable to the credit
card account.
``(C) Definitions.--For purposes of this paragraph--
``(i) the term `Internet' means the international
computer network of both Federal and non-Federal
interoperable packet switched data networks; and
``(ii) the term `interactive computer service' means
any information service, system, or access software
provider that provides or enables computer access by
multiple users to a computer server, including specifically
a service or system that provides access to the Internet
and such systems operated or services offered by libraries
or educational institutions.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(c)(7) of the Truth in
Lending Act, as added by this section.
(2) Effective date.--The amendment made by subsection (a) and
the regulations issued under paragraph (1) of this subsection shall
not take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND PENALTIES.
(a) Disclosures Related to Late Payment Deadlines and Penalties.--
Section 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) is
amended by adding at the end the following:
``(12) If a late payment fee is to be imposed due to the
failure of the obligor to make payment on or before a required
payment due date, the following shall be stated clearly and
conspicuously on the billing statement:
``(A) The date on which that payment is due or, if
different, the earliest date on which a late payment fee may be
charged.
``(B) The amount of the late payment fee to be imposed if
payment is made after such date.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(b)(12) of the Truth in
Lending Act, as added by this section.
(2) Effective date.--The amendment made by subsection (a) and
regulations issued under paragraph (1) of this subsection shall not
take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE
CHARGES.
(a) Prohibition on Certain Actions for Failure To Incur Finance
Charges.--Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is
amended by adding at the end the following:
``(h) Prohibition on Certain Actions for Failure To Incur Finance
Charges.--A creditor of an account under an open end consumer credit
plan may not terminate an account prior to its expiration date solely
because the consumer has not incurred finance charges on the account.
Nothing in this subsection shall prohibit a creditor from terminating
an account for inactivity in 3 or more consecutive months.''.
(b) Regulatory Implementation.--
(1) In general.--The Board shall promulgate regulations
implementing the requirements of section 127(h) of the Truth in
Lending Act, as added by this section.
(2) Effective date.--The amendment made by subsection (a) and
regulations issued under paragraph (1) of this subsection shall not
take effect until the later of--
(A) 12 months after the date of enactment of this Act; or
(B) 12 months after the date of publication of such final
regulations by the Board.
SEC. 1307. DUAL USE DEBIT CARD.
(a) Report.--The Board may conduct a study of, and present to
Congress a report containing its analysis of, consumer protections
under existing law to limit the liability of consumers for unauthorized
use of a debit card or similar access device. Such report, if
submitted, shall include recommendations for legislative initiatives,
if any, of the Board, based on its findings.
(b) Considerations.--In preparing a report under subsection (a),
the Board may include--
(1) the extent to which section 909 of the Electronic Fund
Transfer Act (15 U.S.C. 1693g), as in effect at the time of the
report, and the implementing regulations promulgated by the Board
to carry out that section provide adequate unauthorized use
liability protection for consumers;
(2) the extent to which any voluntary industry rules have
enhanced or may enhance the level of protection afforded consumers
in connection with such unauthorized use liability; and
(3) whether amendments to the Electronic Fund Transfer Act (15
U.S.C. 1693 et seq.), or revisions to regulations promulgated by
the Board to carry out that Act, are necessary to further address
adequate protection for consumers concerning unauthorized use
liability.
SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO DEPENDENT
STUDENTS.
(a) Study.--
(1) In general.--The Board shall conduct a study regarding the
impact that the extension of credit described in paragraph (2) has
on the rate of cases filed under title 11 of the United States
Code.
(2) Extension of credit.--The extension of credit described in
this paragraph is the extension of credit to individuals who are--
(A) claimed as dependents for purposes of the Internal
Revenue Code of 1986; and
(B) enrolled within 1 year of successfully completing all
required secondary education requirements and on a full-time
basis, in postsecondary educational institutions.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Board shall submit to the Senate and the House of
Representatives a report summarizing the results of the study conducted
under subsection (a).
SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS.
(a) Regulations.--Not later than 6 months after the date of
enactment of this Act, the Board, in consultation with the other
Federal banking agencies (as defined in section 3 of the Federal
Deposit Insurance Act), the National Credit Union Administration Board,
and the Federal Trade Commission, shall promulgate regulations to
provide guidance regarding the meaning of the term ``clear and
conspicuous'', as used in subparagraphs (A), (B), and (C) of section
127(b)(11) and clauses (ii) and (iii) of section 127(c)(6)(A) of the
Truth in Lending Act.
(b) Examples.--Regulations promulgated under subsection (a) shall
include examples of clear and conspicuous model disclosures for the
purposes of disclosures required by the provisions of the Truth in
Lending Act referred to in subsection (a).
(c) Standards.--In promulgating regulations under this section, the
Board shall ensure that the clear and conspicuous standard required for
disclosures made under the provisions of the Truth in Lending Act
referred to in subsection (a) can be implemented in a manner which
results in disclosures which are reasonably understandable and designed
to call attention to the nature and significance of the information in
the notice.
TITLE XIV--PREVENTING CORPORATE BANKRUPTCY ABUSE
SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES.
Section 507(a) of title 11, United States Code, as amended by
section 212, is amended--
(1) in paragraph (4) by striking ``90'' and inserting ``180'',
and
(2) in paragraphs (4) and (5) by striking ``$4,000'' and
inserting ``$10,000''.
SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS.
Section 548 of title 11, United States Code, is amended--
(1) in subsections (a) and (b) by striking ``one year'' and
inserting ``2 years'',
(2) in subsection (a)--
(A) by inserting ``(including any transfer to or for the
benefit of an insider under an employment contract)'' after
``transfer'' the 1st place it appears, and
(B) by inserting ``(including any obligation to or for the
benefit of an insider under an employment contract)'' after
``obligation'' the 1st place it appears, and
(3) in subsection (a)(1)(B)(ii)--
(A) in subclause (II) by striking ``or'' at the end,
(B) in subclause (III) by striking the period at the end
and inserting ``; or'', and
(C) by adding at the end the following:
``(IV) made such transfer to or for the benefit of an insider,
or incurred such obligation to or for the benefit of an insider,
under an employment contract and not in the ordinary course of
business.''.
(4) by adding at the end the following:
``(e)(1) In addition to any transfer that the trustee may otherwise
avoid, the trustee may avoid any transfer of an interest of the debtor
in property that was made on or within 10 years before the date of the
filing of the petition, if--
``(A) such transfer was made to a self-settled trust or similar
device;
``(B) such transfer was by the debtor;
``(C) the debtor is a beneficiary of such trust or similar
device; and
``(D) the debtor made such transfer with actual intent to
hinder, delay, or defraud any entity to which the debtor was or
became, on or after the date that such transfer was made, indebted.
``(2) For the purposes of this subsection, a transfer includes a
transfer made in anticipation of any money judgment, settlement, civil
penalty, equitable order, or criminal fine incurred by, or which the
debtor believed would be incurred by--
``(A) any violation of the securities laws (as defined in
section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(47))), any State securities laws, or any regulation or order
issued under Federal securities laws or State securities laws; or
``(B) fraud, deceit, or manipulation in a fiduciary capacity or
in connection with the purchase or sale of any security registered
under section 12 or 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78l and 78o(d)) or under section 6 of the Securities Act
of 1933 (15 U.S.C. 77f).''.
SEC. 1403. PAYMENT OF INSURANCE BENEFITS TO RETIRED EMPLOYEES.
Section 1114 of title 11, United States Code, is amended--
(1) by redesignating subsection (l) as subsection (m), and
(2) by inserting after subsection (k) the following:
``(l) If the debtor, during the 180-day period ending on the date
of the filing of the petition--
``(1) modified retiree benefits; and
``(2) was insolvent on the date such benefits were modified;
the court, on motion of a party in interest, and after notice and a
hearing, shall issue an order reinstating as of the date the
modification was made, such benefits as in effect immediately before
such date unless the court finds that the balance of the equities
clearly favors such modification.''.
SEC. 1404. DEBTS NONDISCHARGEABLE IF INCURRED IN VIOLATION OF
SECURITIES FRAUD LAWS.
(a) Prepetition and Postpetition Effect.--Section 523(a)(19)(B) of
title 11, United States Code, is amended by inserting ``, before, on,
or after the date on which the petition was filed,'' after ``results''.
(b) Effective Date Upon Enactment of Sarbanes-Oxley Act.--The
amendment made by subsection (a) is effective beginning July 30, 2002.
SEC. 1405. APPOINTMENT OF TRUSTEE IN CASES OF SUSPECTED FRAUD.
Section 1104 of title 11, United States Code, is amended by adding
at the end the following:
``(e) The United States trustee shall move for the appointment of a
trustee under subsection (a) if there are reasonable grounds to suspect
that current members of the governing body of the debtor, the debtor's
chief executive or chief financial officer, or members of the governing
body who selected the debtor's chief executive or chief financial
officer, participated in actual fraud, dishonesty, or criminal conduct
in the management of the debtor or the debtor's public financial
reporting.''.
SEC. 1406. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b), this
title and the amendments made by this title shall take effect on the
date of the enactment of this Act.
(b) Application of Amendments.--
(1) In general.--cept as provided in paragraph (2), the
amendments made by this title shall apply only with respect to
cases commenced under title 11 of the United States Code on or
after the date of the enactment of this Act.
(2) Avoidance period.--The amendment made by section 1402(1)
shall apply only with respect to cases commenced under title 11 of
the United States Code more than 1 year after the date of the
enactment of this Act.
TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as otherwise provided in this Act, this
Act and the amendments made by this Act shall take effect 180 days
after the date of enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as otherwise provided in this Act and
paragraph (2), the amendments made by this Act shall not apply with
respect to cases commenced under title 11, United States Code,
before the effective date of this Act.
(2) Certain limitations applicable to debtors.--The amendments
made by sections 308, 322, and 330 shall apply with respect to
cases commenced under title 11, United States Code, on or after the
date of the enactment of this Act.
SEC. 1502. TECHNICAL CORRECTIONS.
(a) Conforming Amendments to Title 11 of the United States Code.--
Title 11 of the United States Code, as amended by the preceding
provisions of this Act, is amended--
(1) in section 507--
(A) in subsection (a)--
(i) in paragraph (5)(B)(ii) by striking ``paragraph
(3)'' and inserting ``paragraph (4)''; and
(ii) in paragraph (8)(D) by striking ``paragraph (3)''
and inserting ``paragraph (4)'';
(B) in subsection (b) by striking ``subsection (a)(1)'' and
inserting ``subsection (a)(2)''; and
(C) in subsection (d) by striking ``subsection (a)(3)'' and
inserting ``subsection (a)(1)'';
(2) in section 523(a)(1)(A) by striking ``507(a)(2)'' and
inserting ``507(a)(3)'';
(3) in section 752(a) by striking ``507(a)(1)'' and inserting
``507(a)(2)'';
(4) in section 766--
(A) in subsection (h) by striking ``507(a)(1)'' and
inserting ``507(a)(2)''; and
(B) in subsection (i) by striking ``507(a)(1)'' each place
it appears and inserting ``507(a)(2)'';
(5) in section 901(a) by striking ``507(a)(1)'' and inserting
``507(a)(2)'';
(6) in section 943(b)(5) by striking ``507(a)(1)'' and
inserting ``507(a)(2)'';
(7) in section 1123(a)(1) by striking ``507(a)(1), 507(a)(2)''
and inserting ``507(a)(2), 507(a)(3)'';
(8) in section 1129(a)(9)--
(A) in subparagraph (A) by striking ``507(a)(1) or
507(a)(2)'' and inserting ``507(a)(2) or 507(a)(3)''; and
(B) in subparagraph (B) by striking ``507(a)(3)'' and
inserting ``507(a)(1)'';
(9) in section 1226(b)(1) by striking ``507(a)(1)'' and
inserting ``507(a)(2)''; and
(10) in section 1326(b)(1) by striking ``507(a)(1)'' and
inserting ``507(a)(2)''.
(b) Related Conforming Amendment.--Section 6(e) of the Securities
Investor Protection Act of 1970 (15 U.S.C. 78fff(e)) is amended by
striking ``507(a)(1)'' and inserting ``507(a)(2)''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.